There is obviously something wrong with the current state of Discovery (community ?) as even vanilla - which has been practically dead for years is suddenly catching up in activity.
So it's not only factions, it's obviously a general trend of dwindling player numbers.
The OF system certainly needs an evolution (not revolution though). It's probably the part of Disco that has received the least attention - even eternally dead Economy got lots of overhauling with the improved ore routes, the NPC plugin, the improved sellpoints for unlawfuls etc.
The OF system as it is right now is quite opaque. Newish players are barely aware of the factions and the way they work. The timetracking counter does not help or encourage quality activity. Start with fixing that and things might improve.