I think language was probably a major barrier in the earlier days of the project. That, and they also kind of took their own approach to implementing ActivityPub. To my knowledge, they still don't really have any implementation of the Mastodon API, so client support is pretty limited compared to other fedi microblogging platforms.
It is popular, but only in japan. In fact, most of japan #twitterMigration has misskey as their destination.
And yes, imho, it is far better and more feature packed than mastodon.
It just doesn't seem very aimed at Westerners. There is a mature fork gaining prominence that is called Calckey… at least, for the next 5 days, until it rebrands. I suggest you check it out.