That doesn’t prevent power hungry mods from modding hundreds of communities, or mods or admins from enshittifying the most popular communities (or whole instances) with absurd rules or misinformation bots, or any other of the abuses that were rampant on reddit and even more rampant here… sure, the users can migrate to some other community or instance, but most won’t (and migrating instances is significantly more work than simply unsubscribing from one subreddit and subscribing to another).
Photocopy of a photocopy is my go-to metaphor for model collapse.