essentially the api will return all toots from whatever timeline you're asking it for, e.g. if your instance is federated with 5 servers, you'll get your timeline from people tooting from these servers, I think the "public" timeline (can't remember the exact name) is all the toots from all federated instances you federate with. So it would be the same data as the browser has.

I think the biggest problem for the app developers is an interface that lists a lot of instances that you can search for which you identify most with (I think some use a centralised list someone has created somewhere). But that's a bad UX to jump into as a new user.