At some point I exceeded 500, but I also have firefox simple tab groups (formerly known as panorama) so I’m usually not looking at a window of more than 100 at a time, and any tabs I haven’t visited since last launch aren’t loaded into ram until I click over to them so they behave more like bookmarks except instead of creating/organizing/cleaning up bookmarks in addition to tabs I just browse/organize/close tabs. Each rabbit hole I go down gets a tab group so if I’m done with a topic I can just close the whole group.
From the related post linked by op, it’s described as just a portion of the managed instance hosting fee going back to the project devs. So if you pay them to host a lemmy instance, a small cut goes to Lemmy devs. Doesn’t seem sketchy at all. Seems to have nothing to do with monetizing the instance itself, which could be funded by voluntary donations as normal or you could probably do membership fees as some instances do. It seems this is just about giving funding to the software devs. Hopefully this encourages other managed hosting providers to also give a cut of their revenue to the software they are using for their business.