Yes, I agree with this. I wrote a blog post about this a while ago. post lemmy discussion.

TL;DR communities on Lemmy are federated and highly dependent on the instance that they live on. If the source instance gets banned or goes offline the community will effectively go offline too.

This can be compared to Matrix rooms which don’t really live on any specific instance and continue even if the source instance goes offline. Defederation will prevent users from seeing posts from users on the blocked instance, but the room itself isn’t affected.

However I feel that trying to solve this by supporting some form of community merging would likely just be papering over the problem. The only way to really solve this is by properly decentralizing communities.