IMO, "free up usernames" recalls the early days of #Mastodon, when various people were writing articles about it without any understanding of #federation and #instances. There were "get in today to reserve your username" articles and there were "the bad thing is that you may have 'you @ example . com', but someone else could get 'you @ example . net'".

When someone closes their account on $INSTANCE, let people that want that same username know that name is available on other instances, but not that one. Any other choice risks someone accidentally sending non-public information to an account which is no longer the one they thought it was a year or two ago.