The question is in principle, how are the witnesses paid and by whom? If there is no hierarchy, i.e. no official company that offers employees or, for that matter, freelancers a contract that both parties can rely on, the payment model is uncertain.

They are paid by the Hive protocol. Their payment structure is consistent they get a certain % of the yearly inflation. There are a few problems with the current model. Putting politics aside (who determines who the 21 witnesses are), the 21 top witnesses accrue a lot of the inflation, which is economically not ethical. While in other systems it's much more fair like in proof of work, and soon ethereum proof of stake is most fair.

That it won't grow here is uncertain, but I share the scepticism about it, insofar as nothing changes in the person structure of the top witnesses and the efforts to keep their own communities at the top end.

Yep, the witnesses haven't changed much in 4 years, which are signs to be worried about.