No, it was always to "create your own community". Right down to the asinine mechanic where the Head mod is simply first come first serve. If Mod A makes a community, assigns Mod B to moderate it, and leaves for 5 years, B cannot override A when he comes back without intervention from Admins. On the contrary, A can kick out B despite doing nothing for 5 years.
They very much designed it for "petty tyrants" and the site should/would have built a much better system to kick out inactive mods if they cared about "being part of a community". But I think we both know that Reddit just cared about free labor (until news sites force their hand).