no it's not instanced. campaign battles are open world you can just run to it, by warping there i mean each zone has a free port there when it's time for the battle. it can have tons of players ..usually did on my server for a long time. so battle starts at one zone you port there fight, then you port to another one that is starting up ...and so forth over and over.

technically i see this happening with all 3 hamlets. back and forth between all 3 over and over openly. witch is why i think it will be easier to get seals ..not percent drop wise but the fact that no one needs to wait around for parties and just sway threw them 16hrs a day if they want like campaign battles.

also the pso idea is probably not far off, they were doing this on the last day of 1.XX if people noticed they had these go here and defend in our logs and stuff. this might be a hint to what might come in 2.0