Apparently Mastodon is AGPLv3'd. That means it's not licensed under a Free Software license; the AGPL is an EULA (like the Windows EULA).
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The AGPL's additional requirements apply only to modified copies. EULAs don't allow making modified copies at all.
You're confused about EULAs. Copies or not is irrelevant (and many EULAs allow copies). Main difference is EULAs control *usage*.
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The AGPL's additional requirements apply to *modifications* even if those modifications are not *distributed*. That makes it an EULA.
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Put another way, copyleft/Free Software licenses operate *entirely* within copyright law and only control distribution. EULAs go further.
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