Are our aquaria too small for normal male behaviour of goodeids?

An observation: due to a population crash (me again, not changing water frequently enough), I am left with only a few males Ameca splendens. No problem for continued breeding, but the remaining males changed behaviour.

I normally have 6-8 males (+ subadults), then they form  20 cm sized territories and spend a lot of time chasing each other, but little time courting females. Their body colouration is kind of average, nice but not outstanding.

I now have only 3 males. one became dominant and the other two hide. The dominant one spends little time chaching the others (he doesn't see them because they hide), but much more time courting females. His colour is outstandingly bright. The submissive males are, as expected, drab.

I presume that a situation with dominant and submissive males is normal for many fish also in nature. However, what about the overcrowded situation with all males territorial, but defending territories of only 20 cm?

In nature, I presume that females chose between the outstandingly bright coloured males which hold large territories. They can probably distinguish small differences in colouzration and courtship of the males, but, I presume, these are only visible when the males are truely outstandingly coloured. In this situation, there can be a mate-selection for optimal fitness of the males. In the overcrowded situation, I am not so sure if the subtle differences between "all average" males tell as much about their individual fitness. So, in an overcrowded aquarium females might mate with "any average male available" while in nature they can select amongst the "best males available". Meaning that mate selection is very different in these two situations. In my aquarium it is even worse now: with only one territorial male, females have little to choose.

I suppose that this has little long-term meaning for inbred strains which have already lost much genetic variation, but in those strains where there is variation left, breeding in overcrowded aquariums might not be the best way to conserve the most healthy lineages.

What would it mean for the welfare of an individual male to be either holder of a 20 cm territory, holder of an "whole aquarium territory" or submissively hiding for much of the time? Note that a submissive animal can become territorial when it has grown or when a territory holder disappears (is removed or dies).