I think it makes more sense to think of local as the federation. It's the communities (planets) that founded the federation or we have treaties with.
All is more like the galaxy. It's the great unknown, containing pleasures to satiate desires both subtle and gross. There is (or will be) everything from hippie planets to gangster planets to cowboy planets to nazi planets. We'll venture out to meet them, and some will become allies, while others will become adversaries. The more we experience, the more we learn about ourselves, but we can always find our way back home to the federation (local).
Although I think customising the interface like that isn't something that Lemmy supports just yet. The operator would have to roll their own version for every new Lemmy update, which seems like a lot of workload for the time being.