What about a new mixed-feed which merges the Subscribed, Local and All feed based on probabilities customable by the user e.g. 10/40/50 or 0/20/80?
This would push users toward local posts (especially on smaller instances) while still supporting a better distribution of user engagement over the threadiverse. And if you don’t trust that it was implemented correctly – you can simply check it by counting the amounts of posts against your chosen probabilities.
I like the idea, but it should also include another feed specifically with subscribed smaller communities, since they'd still get buried under this system.
Honestly don't bother with the customization by the user. That seems to be the solution to when anyone might object to something, but it just creates more confusion to the average user. Maybe keep it as a setting in the instance config. Less is more.