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About 1000% better than completely open signups, but it's not a silver-bullet. Just about all of the bot infected instances I've heard of were due to open signups. It's relatively easy to interface with the lemmy API in that case and create a new account, scripting this to create thousands of new accounts in minutes (potentially) is also relatively easy. Having a captcha disrupts that easy process. It can still be circumvented, as captcha has been circumvented before, but every small roadblock like this can deter automatic bot creation on a particular server; they'll just target one with easier signups instead. Hope that helps explain it a bit at least.