sure, this is pretty standard. how many apps has google shutdown? if google shuts down gmail tomorrow, you'll lose your email. theres an entire site memorializing hundreds of apps google has killed, some of them *very* popular[0]
however, the creators of mastodon have made it super easy to download backups of your follows, your blocklists, etc... and you can import them on any server. so even if that were to happen, you can easily setup another account and be running again.
unlike any of the closed social sites, with mastodon, if one server were to close, the network will be fine.
It is the worst design ever, you can pick an instance and create an account there if you could trust the owner and your timeline isn’t too busy, but YMMV. UX is somewhat close to Twitter 2015, which is an upside.