Creator of Lemmy Federate here (not the main maintainer anymore, handed over to lemmy.world management). The reason I switched to DNS-based authentication is that not all software has messaging capabilities.
For example, WordPress doesn’t have messaging. Guppe uses a different messaging infrastructure based on Mastodon. Custom hobby software doesn’t have it either (blogs like chrastecky.dev). I’m not sure about messaging capabilities of NodeBB and Friendica but DNS-based authentication makes Lemmy Federate support all types of federated software that implements FEP-1b12: group federation.
For example, although Lemmy Federate currently doesn’t have any code specifically for Piefed, it does have Piefed support and 10 instances are already registered.
It’s like a community. They present categories as AP Groups. This way, categories can be viewed as a community on Lemmy. For example:
https://lemmy.world/c/desk@fusil.uk https://lemmy.world/c/programming@chrastecky.dev