I've been asking this question for years and have never gotten a solid answer, nor has it somehow ever seemed to be of much importance to other users. It's the first instance of an object you ever make, it's the one in the top-most layout, yes it can be changed, no it cannot be changed, etc.
It's infuriating when you end up with your "default instance" somehow magically inheriting the properties of some random other instance instead of the first one you created, or whichever you want. This not only becomes the one created at runtime, but the one properties are inherited from when placing a new instance in a layout from the project bar.
I suggested a "make default instance" button years ago but it never happened.
All this time and I too still don't fully understand the inner workings of it :')