I did read the paper fully, but I'm going to comment mostly based on the challenged that the OP refers to.
My belief is that the article is accurate on highlighting that the Fediverse on its own is not enough to reclaim the internet. However, it's still a step in the right direction and should be nurtured as such.
Discoverability as there is no central or unified index
Yes, discovery is harder within a federated platform than a centralised one. However the indices that we use don't need to be "central" or "unified" - it's completely fine if they're decentralised and brought up by third parties, as long as people know about them.
Like Lemmy Explorer for example; it's neither "central" nor "unified", it's simply a tool made by a third party, and yet it solves the issue nicely.
Complicated moderation efforts due to its decentralized nature
This implicit idea, that moderation efforts should be co-ordinated across a whole platform, quickly leads to unsatisfied people - either because they don't feel safe or because they don't feel like they can say what they think. Or both.
Let us not fool ourselves by falsely believing that moderation always boils down to "remove CSAM and Nazi" (i.e. "remove things that decent people universally consider as bad"). Different communities want to be moderated in different, sometimes mutually exclusive, ways. And that leads to decentralised moderation efforts.
In other words: "this is not a bug, this is a feature."
[Note: the above is not an endorsement of Lemmy's blatant lack of mod tools.]
Interoperability between instances of different types (e.g., Lemmy and Funkwhale)
Because yeah, the interoperability between Twitter, YouTube and Reddit is certainly better. /s
I'm being cheeky to highlight that, as problematic that the interoperability between instances of different types might be in the Fediverse, it's still something that you don't typically see in traditional media.
Concentration on a small number of large instances
Yes, user concentration into a few instances is a problem, as it gives the instance admins too much power. However, there's considerably less room for those admins to act in a user-hostile way, before users pack their stuff up and migrate - because the cost of switching federated instances is smaller than the cost of switching non-federated platforms.
The risk of commercial capture by Big Tech
Besides what I said above, on the concentration of users, consider the fact that plenty Fediverse instances defederated Threads. What is this, if not the usage of the Fediverse features to resist commercial capture?