I don’t know if you’re aware of this, but hosting internet services is not free at all. I could fully understand why you’d basically force people to pay at least something instead of hoping that people choose to donate.

Lemmy is supposed to be a FOSS platform.

FOSS is free and open source SOFTWARE, i.e. the software is the free part. You’re free to host your own Lemmy instance if you’re displeased.