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How does Federating work?
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As far as I understand, a server (in Lemmy) can allow federation or limit it to what the server admin allows. Effectively you can think of federation as a two was subscription. The "host" server of a community has the entire community posts etc... And then anyone that subscribes to a community from a other server gets the updates etc... From the "home" server.
So for a single community (in your example hosted on server A for example), server B, C and D can "federate" to that server for that community, and there is no concept of B and D federatingb for that community.
So Lemmy is kind of similar to an old school forum, but with some magic of having shared logins, so you can loging with an account on a other server, and subsequently get updates into your feed.
If a server admin has issues with users or communities from a other server I believe they can use the concept of white-listing (only connect to specific servers) or black-listing (block specific servers) to "de-federate".
I am not an expert by any means, but this is my understanding.
Check out the following link to get "more correct" information. lemmy federation