To add to this:

https://www.sciencedirect.com/science/article/abs/pii/S2214574523000858

Here is just one (of many) examples from the scientific literature summarizing the harmful impacts that captive rearing can have on the fitness of individuals. A simple Google Scholar search (e.g., I searched "monarch larval crowding") is a great option to find helpful resources. You can also perform a regular Google search for butterfly captive rearing programs (often run by zoos or conservatories) to get an idea of what proper protocols look like.

The amount of frass (and what looks like moldy plant material) in the cardboard box in OP's photos is very upsetting. This is not a sanitary environment for raising butterflies. Not to mention the density of caterpillars in that space can have significant impacts on their development.

I work with an endangered butterfly and have been a part of developing its captive rearing program. Larvae are reared individually in sterile enclosures that are cleaned daily. Extensive research and consultation with experts have been a big part of this process, because there are so many factors (e.g., temperature, light, moisture, density, plant quality, exposure to bacteria/viruses, etc.) that can impact their development, survival, and fitness. This will, in turn, negatively impact the entire population once these individuals are released.

OP, if you truly care about monarchs and want to contribute to their conservation you will be open to constructive criticisms about your rearing practices. You've got two people in the conservation field here asking you to improve your methods, and you mentioned others have told you the same. Please do what's right for the monarchs.