Today, on just one of several of my Instagram accounts, I noticed Instagram promoting this new Follow Hashtag feature in my feed. Basically it does what it says. You can now follow specific hashtags you're interested in, to see more posts from these topics in your feed.
I tried to find it in my other accounts to no avail. So it must be rolling out gradually. Perhaps based on account creation date? As I got it on my oldest account.
At any rate, this change will bring with it several changes to end users. Here is how I see it.
Consumer: Here I refer to someone who is interested in following certain topic, say #GameDev or #Photography. You will start seeing more variety and different content in your feed, without the need to actively seek it out in the Search section. It's opt-in, so it won't affect you if you don't like it.
Producers: Those who are constantly posting content to build an audience are likely to get affected. If you have been disappointed by the low reach to your followers due to Instagram's Smart Feed, this change might have even bigger effect. As consumers now will see more stuff on their feed, thus affecting your content visibility. And even more, those consumers might find more eye-catching content and producers to follow, and unfollow older ones.
On the other hand, if you're really popular and/or post good stuff, then your content might have much better visibility, thus expanding your reach.
So for producers, it's a double-edged sword, and it heavily depends on how Instagram will pick the content to feature, and how often it will do it.