I'm no lawyer but I do look at application contracts quite often.
It makes it clear you, as a user, are OPTING IN to the federation service. So it sounds like it won't be enabled by default, as expected.
In regards to "the Protocol", this is Threads saying "look, if you opt into this, we don't control how your content is used once it leaves our system. We do our best to communicate your request, but it's up to the third parties to handle it ultimately."
Another interesting addition is that even if you DO NOT opt in, they are making sure you understand any public post can still be seen outside of the Threads service. Normal things like a public embed, search engine indexing, or scrapers (sound familiar?)
But! We've already seen this a bit, they are mentioning that your content can appear on OTHER Meta platforms like Instagram or Facebook. Even if you are NOT opted in to "the Protocol".
If you have a fediverse account, you can quote this note from your own instance. Search https://mastodon.social/users/box464/statuses/114429932870160512 on your instance and quote it. (Note that quoting is not supported in Mastodon.)
