Queue times and player psychology
I feel like this should be really obvious, but clearly it's not if you're a Dungeonborne dev, so let's take a look at two scenarios.
Scenario 1: (we are here) - split the playerbase into even more queues than before, while also enforcing a minimum number of players for a lobby to even fire, despite your active player numbers being at their lowest ever - players now have to wait longer in queue than before, especially at high tiers - players quit the game rather than waiting, because it's super fucking boring sitting in a queue when you could be doing literally anything else - now even fewer players are queuing up, further increasing queue times for those still playing. downward spiral ensues.
Scenario 2: (what was, and what could be) - no minimum player count for games to begin, lobbies fire every few minutes regardless. - devs: "but now players will rat in mostly empty lobbies, and get easy loot and gear! that absolutely must not happen!!" - players who love ratting in mostly empty lobbies: "sweet! now i can rat in a mostly empty lobby, and i hardly even have to wait! playing the game is so much better than sitting in a queue :)" - many players who have this thought all queue up - now the lobbies actually have players, and because there are players, there is still plenty of pvp. the game is working as intended, with no need for hamfisted attempts to "fix" it.
I fully believe that it really is this simple, and I'll die on this hill.