Microservices are not just about scaling and performance but it is a core advantage. To say they have “nothing” to do with it is outright false.
They have nothing to do with performance. You can improve performance with vertical scaling, which nowadays has a very high ceiling.
It's not a coincidence that startups are advised against going with microservices until they grow considerably. The growth is organizational, and not traffic.
Microservices are about modular design and decoupling units of code from each other.
Yes, but you're failing to understand that the bottleneck that's fixed by peeling off microservices is the human one faced by project managers. In fact, being forced to pay the microservices tax can and often does add performance penalties.
The problem with this approach is that switching from vertical to horizontal is extremely hard if you didn’t plan for it from the start.
I think you're missing the point that more often than not ain't going to need it.
In the rare cases you do, microservices is not a magic wand that fixes problems. The system requires far more architectural changes that go well beyond getting a process to run somewhere else.
The single most important decision is external interfaces, and establish service level agreements with clients.
Once the external interface is set, managers have total control over what happens internally. If they choose to, they can repeatedly move back and forth peeling out and merging in microservices. That's actually one of the main selling points of microservices: once an API gateway is in place, they are completely free to work independently on independent services and even their replacements.
Microservices are first and foremost an organizational tool.