I’ll preface that none of this is meant as an actual threat.
Psychologically to someone not IT savy, the instagram hack might seem like someone means business. If I made the same threat and showed someone photos of their children, they’d surely feel similar, despite the fact that all that proves is that I know where they live and I own a camera.
A whopping number of online scams begin with bluffs, the scammer only needs 1% of people to believe them. The instagram account takeover is for emotional leverage to get a person further away from their friends. A second story will be concoted to get money from them.
Aren't most armed robberies a bluff too? "Give me your wallet or I will kill you."
Even if the robber has no intention of actually killing the victim and just wants their money, this is still very much a threat, and whether it was a bluff or not, it still causes distress and possibly trauma.
I’m not suggesting either direction, I’m saying that some people may take an Instagram hack+threat more seriously than others, but that all threats could be bluffs and the objective of any data provided by the blackmailer is to increase plausibility, and the victims literacy in the topic is relevant to their response
Psychologically to someone not IT savy, the instagram hack might seem like someone means business. If I made the same threat and showed someone photos of their children, they’d surely feel similar, despite the fact that all that proves is that I know where they live and I own a camera.