If you mean to choose a Yet Another Small Community of Users, there’s never been a shortage of those, and there’s barely a need for the federated space for that.
If you don’t want to see how abusing power to remove and drive users away from communities removes and drives users away from communities, I don’t know what to tell you, but I think people are coming to the federated space seeking alternatives to reddit and twitter, not just small communities, so unless something is done about the federated architecture, what happens to access to the biggest communities will always matter in regards to population numbers.
If a user gets their account banned and purged for barely any reason but extreme escalation, I think that will always be a concern - you have no assurance that users will simply create another account and remain. If there’s going to be abuse by the leadership in the alternative, why would anyone who comments on RedditMigration simply remain in the fediverse and not go back to Reddit? If you are going to get falsely accused accused and banned for shit reasons, even to the point of an admin of the most popular instance fabricating accusations that you are an alt of a CSAM account, why would most people remain?