If I understand the Nostr system correctly, the relays are designed to be self-contained; whatever is saved on a relay stays on the same relay, UNLESS the relay operator decides to share those notes with other relays. With the current deployments, are most of the relay operators sharing with all the other relays, even the paid ones?

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The way I understand it is like this.

Relays don't communicate with other relays, relays only really serve information. If it consumes or creates content it would technically be a client. You can set up a simple script to mirror events from one relay to the next.

I thought it was more like a mesh with operators being able to block whole relays if they choose.

I believe if I go to a note and tap “transmit” (or whatever your client calls it), a note would get sent to all the relays I publish to, in addition whatever you had previously published to. Normal relay behavior does not include relay to relay communication, at least as far as I am aware.