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Lemmy.world (and some others) were hacked
(lemmy.world)
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Databases don't store passwords to begin with so passwords can't really be leaked. They store a hash of your password. So if your password is of sufficient length it could take 100s or 1000s of years to find a match to the hash. If you have a really short password or if the hash is using an insufficient hash algorithm then there exist these things called rainbow tables which are a list of every hash and it could simply be looked up what your password is.
Not all software developers follow those guidelines - either out of laziness or incompetence. Plenty of sites/companies have had password leaks due to improper storage. The best way to protect yourself is to use unique passwords for all accounts.