I don’t know about this API blackout. I am talking about something else entirely. When Reddit migration was at its peak, registrations on this instance (lemmy.ml). The reason given was that the devs did not want to overwhelm themselves with the abruptly increased administrative and moderation responsibilities. At that time, Lemmy (the software) was facing significant performance issues as well, owing to the fact that that many users had not used Lemmy concurrently before that.
On the other hand, I tried to find the announcement post for this. (I remember one existing.) But I couldn’t. Have I hallicinated an elaborate scenario? I am not sure. Will try to look again.
As far as I can tell, .world is great for the reddit emigres. There have been disagreements amd drama (as is tradition with online communities especially federated ones) but the instance is doing fine it seems.