Not sure I'd call it "insulated", the internet is just very, very vast, even when considering "just" the English-speaking web. Then you have all the other "versions" out there too that are kind of hidden to most people :)
Anecdotal, but also first time I heard about AO3, and I'd consider myself having broad interests and generally well-read, although my interests doesn't include fanfiction so maybe not so weird I haven't heard about it before.
FWIW the vast majority of writing on there is decidedly mediocre. There is also an even more inferior alternative called Wattpad.
Funnily enough you learn that in general we aren't all that different in our tastes, it's just that what men like to watch, women like to read / imagine.
Edit: to paint the picture, this[0] was sent to me a while back :-)
[0]https://www.tiktok.com/@alexarowe11/video/746846214634761757...
Having been an active internet user for longer than most AO3 users have been alive, the first time I heard about it was a few years ago in a student radio show about the fanfic genre and culture. Poorly written smut featuring popular culture characters has just never been my thing. Probably because I’m not that much of a fan of any specific fictional setting or franchise in the first place.
I don't think it's as gendered as you paint it, but I'd also acknowledge it depends a lot on geographic location, probably looks different where I am compared to where you are, I agree with that we probably aren't all that different in tastes in general :)
I've been reading fanfiction on the Internet for two decades, so for me it would've been quite hard to miss it.
Kind of crazy to hear. AO3 is so culturally massive I don't know how you miss it.
I remember when I first stumbled across the main Antimemetics Division storyline on SCP. https://scp-wiki.wikidot.com/antimemetics-division-hub
"Yeah, we get that a lot."
XKCD on index number exhaution: https://xkcd.com/865/ Remember Data and the Borg? "Accessing... accessing... accessing... accessing..."
I'm sure you can find lots of studies about this, but just for a very easy data point, a few years old survey shows that AO3 is ~54% cis female, ~5% cis male, rest nonbinary/trans/etc.
Who is a better judge of what is insulated or not, someone who spent decades living in a single city, or someone who spent a few years traveling everywhere?
(I bring up 4chan because by virtue of being practically unmoderated, it is about as unlike a bubble as you can get. Where else do you get people into origami, hardcore rape porn, international backpacking, nobel prize winning mathematicians, and pranksters running iphone microwaving campaigns rubbing shoulders?)