What does the EU instance have to do with any of this? The instance started before there was any talk of anyone buying Twitter.
edit: HN won't let me reply, so:
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I had a whole comment written, but you deleted and remade before I posted, and I lost what I wrote.
But the gist is, no, the existence of the instance alone has nothing to do with Musk.
It could possibly have nudged them to speed up existing plans, but that's not the same as "EU signalling that Elon Musk is bad for the democracy." It's them signaling proprietary social media under the influence of a non-EU power is bad for democracy in the EU.
This is one of the possible failure modes they hoped to avoid by exploring alternatives to commercial social media. The conversations are long-running and high-level.
I don't like EU signalling that Elon Musk is bad for the democracy, while the other people there were good. That was never the case.
I don't think EU should spend money and time on that (unless the EU politicians step down from Twitter and stop to see that as our virtual Agora)