The number of communities doesn’t matter if the UX is too complicated.
Look at Reddit, it has an increadible number of communities and users, yet for the user it is fairly simple to navigate, you can easily link communities by prefixing /r/ to the community name in a reddit post.
Lemmy communities on the other hand use a far more complex link structure: !asklemmy
That is a huge barrier of entry for normal users, then we have user links:
This is just plain annoying to most non technical users, and will push them away.
Lemmy is just teetering on the edge of being too hard to use, for technical users it can be hard to learn, but for normal users, it can be too much to even look at the communities, let alone, creating a new user.