Nowhere in that link does it say what you’re saying. Kbin was not named after the instance, but sbin. The instance is named after the gun because apparently it sounds nice in Polish.
Literally the first comment in the thread you linked sorted by Hot has a direct quote from the dev which contradicts your title.
Both. The text data is in the database of all instances that are federated. Your account credentials are only stored on the instance you’re registered to.