CommunityDrawerItems receive data based upon which they render. This data is prepared for them here, in the CommunityDrawerContent component, so that each item doesn't need to worry about which level its on etc.
Whether the subchannels button should be rendered by an item is based on two things:

1. does it have any subchannels
2. is it on level 2 (MAX_DEPTH)

So since an item doesn't know what level it is on, this information is looked at here, and the showSubchannelsButton flag is set.

Right, this code is incorrect.
But in D5951 we use useFilteredChatListData, and get a $ReadOnlyArray<ChatThreadItem>, because we need the mostRecentMessageInfo for each subchannel. Here I don't need that, so I'll stick with using childThreadInfos selector that returns { +[id: string]: $ReadOnlyArray<ThreadInfo> }, and I'll filter out children that aren't channels.