This is still an issue with Lemmy though. Ultimately, one instance’s community is going to be “the” community for a given topic, most likely because it’s on a popular instance, and at a certain point it’s going to devolve the same way default subs did. People who wouldn’t join r/SeaWa probably aren’t going to join seattle@unpopular.domain with 50 active users, either. Personally, I’m more inclined to choose r/SeaWa over r/Seattle because it sounds less official.
This seems more like an aesthetic issue than a real problem, and don’t get me wrong, I’m all for getting the community name you want on a different instance, but I don’t think that’s grounds for “Lemmy will never become a circlejerk”.
I believe this is usually covered by the fact that you can do just about anything you need to do over mail. I once ran into a government site that only worked on Edge.