The consequence of that is that every release is a fairly big deal requiring a lot of coordination overhead among a huge number of people, which bottlenecks how often they can happen. That's fine for a foundational piece of technical infrastructure like an operating system kernel, but Web apps and other forms of continuously delivered software want to release weekly or more frequently, and there's no way that could happen if every release incorporated 12,000 people's work. That is the problem that microservices solve.
Not that I'm super-familliar with Linux kernel development, but that's kind of a special project that has a benevolent dictator and worldwide interest from several industries willing to throw resources at it. I think what you said is sound, but I'm not sure how comparable the Linux kernel is to the way that most for-profit software firms are run. And maybe that says a lot about FOSS.