I'm a big fan of liberating data (especially my own!) from walled gardens, but I have to assume that whatever they're doing is against Instagram's terms and Instagram will do everything to stop/break this.
It would appear that you assume incorrectly. Instagram will let you dump all your data into a JSON. All Pixelfed is doing is reading that JSON. Pixelfed has no contract with Meta that would block them from reading in that JSON.
As a victim of Meta's Cease and Desists for open-wa, the contract terms is in the Terms of Service that anyone associated with Pixelfed, or anyone associated with the development of Pixelfed has ever accepted regardless if it's a personal or testing account.
In these ToS agreements, Meta believes they can prevent anyone making any tools that they deem break any of their ridiculous terms of service.
I literally had to stop working on my OSS project/tool due to this bullying. Unfortunately I, or other Devs, do not have enough resources to fight this immoral megacorp so therefore they win our compliance.
The neat thing is that it unzips the file locally and only uploads the posts you select, which Dansup says helped get around very large instagram archives and also means you don't have to worry about posts you don't want imported being sent to the pixelfed server.
IG has to allow an export function, if nothing else to help with compliance (e.g. CCPA) and in a digestible format. All PF has done is built a parser for said JSON formatting.
This is marketing speak. Do not call it walled gardens. Called it curated, fixed, whatever.
Gardens have delicious fruits, vegetables, and beautiful flowers. It creates a positive emotional spin on what is otherwise something bad for consumers.
I've only ever heard "walled garden" used in a negative sense, so I think most people get that it's not meant to be a good thing. Emphasis is placed on the "wall" rather than the "garden".