I don't think people are being scared away by UI, I believe it's an issue of discovery, whereas potential frens (as of those not on fedi yet) aren't aware of some of these lax smaller user instances. It also doesn't help when most people that haven't touched it are hearing about fedi by the disarray of Mastodon and it's respective cancel culture, or it being inaccurately advertised as a 'safe space'.

Either way, I'm sure more inter-instance hangouts/events (of alike instances) and such may get some people to stick around more.