This is gonna sound like a sarcastic "Game bad because servers locked" but I genuinely don't know, why do they lock character creations on servers? What purpose is it serving? I know it happens when there is a high amount of people playing on particular servers (I'm pretty sure at least) but I'm confused as to how locking character creation helps that. Can anyone explain?

some how takes up that servers resources while creating one or something i guess

Creating characters causes more server load than logging them in; it takes system resources to put them into the database and do all of the initial setup. For an individual character it might not be notable, but when there's a queue, one character creation is worth multiple people waiting in line, system resource wise.

It's like the load on your computer when loading a game vs the load when playing the game.

Right now the team is focusing every single available system resource on supporting current players playing the game. It's the same reason that they're not showing the toons on the character select screen. EVERYTHING (and I do mean everything: they took backup dev servers offline to add them to queue support) is right now being utilized to get us logging in to play.

"New characters cannot be created on a World that is experiencing congestion. This is because new characters must be logged in to the World in order to be added to the database and complete other character creation processes."

https://na.finalfantasyxiv.com/lodestone/topics/detail/1f70135439286fa66209cd21c10e73ebb986a6ee

A server has a player limit. So they'd either have to kick a player off, increase the strain on the server which risks instability, or add them to an already full queue.