I wanna reshare my experiences here. Essentially it doesn't scale well with large rooms, and isn't friendly with janky/underpowered equipment like XMPP. But with a lot of performance tuning it can go a long way.
For a room, the amount of servers you federate with is a more reliable metric than member count (so 5000 accounts on 2 servers would likely take less load than 500 accounts on 500 servers, as an example). There are some large public rooms that are very broken, and I advise banning them before users get to join
