1. yes, by being a massively bigger instance their algorithm will have a huge impact on the feed algorithms on the fediverse side. If they show a post in their algorithm in threads, it will get massively more engagement due to just being shown to a larger user base

The only "solution" is granular federation - the fediverse side could treat them differently, say by having their posts and comments count less when building a feed... But that's easier said than done. Do they build a "threads ranking" feature into the core, or do they they give admins the tools to build specific configurations for federation?

It's definitely not present in Lemmy, and I don't believe Mastodon has it either. And on that topic...

2. they have granular control over their own federation. They're a monolith where the fediverse isn't - if they want to sprinkle in fediverse content, it's much easier for them. If they want to publish only their most controversial content to the fediverse, they can. They can do it at any time telling no one

For example, there was a post claiming they're blocking toots referencing pixel fed. I don't know if it's true or not, but they easily could. And in doing so, they effectively derank those posts in the fediverse (see point 1)

3. they could EEE conventionally, by extending the activity pub standard to serve their needs, or by making the fediverse reliant on their content then pulling away

There's a lot of ways they can leverage their size as a weapon. They're not another instance, they're a private monolith running their own code... And they have a terrible track record