The other really cool use I've seen of this style of stitching is emergent songs. Here's an example: https://www.tiktok.com/@patwhoisnice/video/69158104300531089...
The average follower count for even just a regular user who has maybe 1-2 good videos can be in the low thousands.
There's always a cost, established celebs have trouble keeping up their fame. There's always some big players quit Douyin (Chinese version of Tiktok) after burn out. No one rules Tiktok forever (which is a good thing for consumers)
It could become a problem for them if another app offered creators a better deal, but such an app still has network effects to contend with (you can offer creators a better deal but if the viewers don’t follow them it won’t work).