My proposal concerns servers, not communities.
What's the difference? Servers are communities.
encourage them to join local communities where they might discuss local issues
There's that false dichotomy again. I think what instance someone is on has very little effect on what content they engage with. And if it does, this change would be detrimental rather than beneficial.
Corporate social media is only biased towards local if you count the whole USA as "local". Again, seems to be a misunderstanding. In the US case "local" would mean state or town.
We must be using different corporate social media. Of course facebook, twitter and tiktok show different content depending on every factor there is. The thing is, they wont confront you with people from your town that have a different opinion. They are tuned towards NOT changing whatever opinion you already have, unless you're pre-disposed to going down dopamine-laced rabbit holes.
Meanwhile, the fediverse does confront people with differing opinions. That it doesn't necessarily do so locally, is a feature, not a bug.