But is there federation between instances of this and the official signal servers?

There will likely never be federation between Signal's official servers and any other servers. Signal introduces privacy features semiregularly; we all saw with Matrix how difficult that is in a highly-federated environment.

Well, obviously not. Official Signal does not support federation.

No. But iirc Molly can connect to a federated version. You just have to pick. It's one or the other