Yeah thinking about this, individual servers for specialized topics seems like the way to go. I guess it depends on the type of community. Vegan is large enough but still a specialized community that yeah doesn't need size. It's specialized but not a niche.

But other niche communities, e.g. av1, jpegxl or velomobile, are too niche to work without more people. I think.

But it would still be good if you could at least set a community to automatically "forward" to a new instance. And maybe that a community could "export" the posts from existing instance to a new instance. Then you could move or merge. I believe something like that is needed.