Simple answer to the question so far as I can see: in order to connect with someone, you have to video conference with them and show them a code. So the anonymity is only as anonymous as the video conference you use to do that. All of the benefits it claims are merely an illusion.
Instagram Lite is an okay alternative to the bigger, main client and since it’s official, it won’t get you banned. It’s not available in most markets, but sideloading from APKMirror works very well.
Thereby surrendering your anonymity and negating any reason to use the app over mainstream alternatives.