Going to copy paste the response I made when this was posted in a different community:
When the Twitter migration happened, a lot of folks got overenthusiastic about the idea of the fediverse and started setting up their own Mastodon instances, despite having little to no experience with selfhosting before.
A lot of such instances have since shut down as they realised the amount of efforts that actually needs into hosting such a platform, especially instances with open registrations. However, a large number of them did survive and are now thriving.
Has the growth rate slowed? Sure, just like it is expected happen after a sudden influx. But it is false to say that Mastodon growth has stalled. Instead, the phrase I would use is 'stabilized'. Mastodon growth has stabilized into a healthy level as user growth is now happening more organically. Some stats below: