Because it’s not designed to be a knowledge base, it’s designed to imitate human communication. It’s the same reason why ChatGPT can’t do maths - it doesn’t “know” anything, it just predicts the most likely word/bit-of-a-word to come next. ChatGPT being as good as it is at, say, writing code given a natural language prompt is sort of just a happy accident, but people now expect that to be it’s primary function.
Pretty sure combining communities isn’t possible, from what I’ve read the idea is that after a bit the most popular incarnations of any particular community will win out and the problem should somewhat solve itself. Don’t think that solves the problem of being overly reliant on a single instance to host that community tho.
There are some duplicate communities (e.g. cats@instance1 and cats@instance2 to use your example) but you can subscribe to and interact with either/both communities without leaving your chosen instance - you don’t need to make multiple accounts.
You can hide read posts, it’s a checkbox in the account settings menu