They haven’t said why. I’m assuming that federation with outside entities would present some logistical problems for them w/r/t their privacy obligations in Europe. If that’s right, I suspect the whole ActivityPub thing could be “delayed” indefinitely.
I will add that many of us who work remotely using publicly accessible wifi also use VPNs, and Imgur actively blocks IPs from multiple commercial VPN providers. If you want those users to see the image you’re sharing, Imgur is not the way to go.
Pixelfed works well with other Fediverse services like Kbin and Lemmy. Try hosting there!