I strongly suspect that connecting a new server to the federation, which has 1000 active users, is better than connecting 1000 more active users to an existing server.
1000 new users on an existing server are 1000 app/browser instances making separate network connections and separate little queries to that server.
Whereas (I would hope) there are aggregation efficiencies in connecting a new 1000-user instance to the network.
Also remember there are certain optimizations in Mastodon. If an instance A generates a toot, but the toot has no followers on instance B, then B doesn't see it. However, an instance always processes a toot from its own directly connected user's browser or Mastodon application.
1000 new users on an existing server are 1000 app/browser instances making separate network connections and separate little queries to that server.
Whereas (I would hope) there are aggregation efficiencies in connecting a new 1000-user instance to the network.
Also remember there are certain optimizations in Mastodon. If an instance A generates a toot, but the toot has no followers on instance B, then B doesn't see it. However, an instance always processes a toot from its own directly connected user's browser or Mastodon application.