Yes and no. If everyone goes their own way and doesn't cluster up, its basically a bunch of people playing solo together.

If you're in the same "chunk" there is some scaling.
Simply put, chunks are the large plots of area that are actually loaded in, and are only loaded in while a player is inside that chunk.

In a way. Creature health and damage output increases according to how many players are within 100 meters of it.

Effects of creature scaling[valheim.fandom.com]