[cyphar]

Yes, but it should be noted identity servers are only used for associating phone numbers and email addresses to Matrix IDs. Matrix IDs themselves are federated just like email addresses (@cyphar:cyphar.com is mine, and it's hosted on my own homeserver at cyphar.com).

If you don't register your phone number or email address (which last I checked is not part of the default account creation flow) then it really makes no difference. I agree they should be federated (and they have been working on that among many other things) but it's not like every user's identity is centralised.