I'm just starting to figure it out, but I think it'll work out to be its own thing, even if it won't replace Reddit. Just as I enjoy both Mastodon and Twitter (though Twitter is becoming less and less enjoyable) I see something similar happening with Lemmy.
I'm also not opposed to a bit of fracturing. I grew up in the era of online message boards, and I still enjoy those and honestly think there's some that are better than anything on Reddit. Having small areas where people can talk about one of their niche interests is cool.
That's one of the reasons that I was able to join a Mastodon instance that didn't revolve around people leaving Twitter. Sure, I became more active on it when I wanted to reduce my Twitter usage, but there was already a good community of people that I knew and I could interact with about everyday things, rather than just complaining about Twitter. Hopefully this instance becomes a bit like that, where it's a separate community that's kind of like Reddit but also its own thing.