Floatplane is stagnant because both of their publicly stated growth plans fell through.
They initially wanted to onboard video uploaders and streamers regularly, as well as selling a white label version of the software as a service to interested companies. Neither panned out.
Part of my overall confusion with Floatplane being a thing to begin with was that there are commercially available options to providing hosted video and livestreaming for businesses. I've used
Wowza as far back as 2014, but there are dozens of others who sell similar services. When they started Floatplane and decided to not fork any of the popular open source offerings like PeerTube. AVideo, or OSP, I assumed they were in fact trying to compete for this white label market. They'd use it publicly for LTT as a showpiece and the real angle was to have it be enticing for companies to pay large sums of money for ongoing use. Had they actually done anything novel or interesting with Floatplane it might have worked, but from what I have seen and heard regarding the project, it's 3-5 devs building their resumes and developing features without a real end vision for the site. (In-between being tasked by Linus/Luke to develop software and publish websites for other LTT projects)
The angle of attracting 3rd party YouTubers/streamers also would have worked, had Linus not gotten cold feat due to
needing to arbitrarily wanting to moderate their catalog of videos and not risk unsavory content being uploaded. Linus publicly expressed concern over Twitch thots and OnlyFans girls causing them issues related to sponsors/advertisers. So in the end they allowed on a small number of personal/professional friends who Linus self-vetted, none have large audiences and using Floatplane for them is entirely superfluous to their actual channels. It's the same hang-up Linus had with running a VPN, if he didn't have total control over every aspect of the users, he didn't want to "risk" the potential bad publicity or associated drama.
As for revenue overall,
I think merch is a much bigger deal for them now, but for every stellar product of theirs like the screwdriver, there are many that have issues or have not generated significant revenue. They run the risk of needing reliable repeat customers to keep buying products, but there are a finite number of shirts/waterbottles/mousepads that people need. A lot of their product lines have been axed: pillows, women's clothing, jackets, home decor, etc. and their current big product; magnetic cable management accessories, haven't had stellar sales numbers so far. I believe this is the biggest risk for LTT, because once the overhead eclipses profit from their merch, it will drag them down.
Linus has talked about opening his supply chain up to others, as an alternative to shitty YouTuber merch sites, but this goes back to him needing total control and being unwilling to onboard random YouTubers that could reflect negatively on him in the future.