TL;DR: The current Mastodon-signup is only removing the confusion of users on first glance, because it either hides the server-choice altogether, or leaves them with a choice that is impossible to make at this point of their Mastodon-journey. Instead, it should introduce them to decentrality on a lower scale, with a handful of handpicked servers to choose from, such that the decision makes sense to them and shows them the merits and fun of the concept instead of scaring them away. Ideal would be to give them a sense of agency. Then, chances are higher that they consider migrating again in the future and eventually internalize it as a permanent option of the digital world.
Though if decentralization were to be hidden, it’d be a good idea to cycle through lots of well established general instances for user signups under the hood. The vast majority of people are just going to choose the default options, and if it’s all going to funnel into mastodon.social, that’s a lot of centralization of users. Ideally no single server lords over all the others in terms of user count, because that gives them lots of power other instances may feel compelled to abide by. Having power spread out across many different people helps keep things in check, at the very least making large or drastic decisions more of a round table affair.