I think (!), This is suboptimal wording. Basically, you select what account it will use to do a search. And definitely to do a search the app will connect to the corresponding instance using your account
I think this is a limitation of Lemmy. There is no one single Lemmy. Each instance talks to a set of other instances and has their own block list. Things you can find on one instance might not available on another one
I logged in 2 accounts on Liftoff, from different instances. The other account is on a smaller instances and I noticed the search is slower and maybe lesser result.