Ironically the two are only half way competing with each other. There's two buckets of twitter peeps:
A) People who keep up with specific people, reducing day by day.
B) The for you page peeps. The vast majority of people I know on Twitter including myself are there for the algorithm feeding us memes and content. Specifically the 2016-2021 algorithm.
Considering mastodon doesn't have any form of FYP/For you it's really only competing for bucket A which in my experience has reduced by an incredible amount in the past few years and continues to reduce and makes it useless to a large majority of twitter users.
Unfortunately or fortunately twitters algorithm also sucks now so there's a pretty big market gap here.