I won't try to deny that the cost of living has further dented sales of Collectables or that, because of changes in fashion and decor, they were already seeing a decline. But your point about the search defaulting to a category is also relevant IMO and symptomatic of wider problems with the search.
Not so long ago Collectables had many of its old categories swept away, to be replaced by searching by IS in fewer but much larger categories. I think this has caused much confusion for both buyers and sellers. Before listing an item I research current asking prices and recent sold prices. I've also learnt to check a lot more carefully which category items that have sold are listed in. One thing I'm finding is that items are selling in categories that I wouldn't have thought to list them in and all too often I'm not even offered as suggestions by ebay on the listing form.
IMO buyers are equally confused, not having yet worked out which categories, other than the default, will give them the higher numbers of items with sellers scattering them all over the site in unfamiliar categories.
For example I listed a 25% lead crystal Trinket Box, thinking to probably list in (something like Glass/ Crystal > Decorative Crystal > Bowls & Boxes) only to find that several of the same items have sold recently in Vanity Perfume & Grooming > Trays & Sets > Trinket & Pill Boxes. Eventually, by playing about with my title wording, I persuaded ebay to suggest that category to me. (A day later, one view, no Watchers yet, so perhaps I guessed wrong!)
I also agree with @british-ceramics-and-paintings , that ebay has gone too far with "offers", slowing sales as 'buyers' put items on their Watch List and sit and wait for offers to come in. Virtually everything I list has Watchers, who will watch for weeks or months, but sales get ever fewer
I also sell on ebid also without BO and buyers turn-up and buy (not watch) and in increasing numbers. Mainly, I think, because their search works properly and buyers find my stuff easily. Most of my buyers make their first purchase on the site from me. But after their first purchase, I'm finding that some return to make multiple purchases, something of a rarity on ebay. To me that indicates that, like I do, they have a 'Wish List' of items they're looking for but can't find on ebay. They are, perhaps, turning to other search engines outside of ebay in frustration?
I used to split my efforts between the two sites more or less 50/50. Now I don't, so a direct comparison of sales numbers is of little use, but I will say that I've already sold more items this year on the other site than I did on ebay all last year, despite letting my listing numbers increase to more than ever before. That's something ebay should be thinking about (IMO), at least in Collectables categories. If buyers and sellers are both looking elsewhere, it's likely that it's because they're not happy with ebay as it is or how it works (or not) for them.
