I have been using Lemmy for 20 days, at first I opened an account at Lemmy.world because you can join without writing a text and waiting approval. I have been enjoying the experience overall but despite the admin teans best efforts Lemmy.world has been experiencing some serious performance issues. If you want to avoid that join a smaller instance, preferably hosted in your country. I joined discuss.tchncs.de today and everything is so much faster it has added benefit of being able to see beehaw.org posts too. It will improve not only your but all other Lemmy.world users experience too.
At the very least they would get access to your IP address (assuming you aren’t ok a VPN/proxy) and browsing habits. Whether they take the steps to log those in a usable format and do something with it? I wouldn’t say the risk is much different on an instance with 1000 users vs 100.
My main concern would be instance longevity.