As with any data study, it always helps to read the fine print. This is how they measure engagement rate: "The firm measures engagement with a like follower ratio or the average number of likes on each Instagram post compared to the number of followers."

Thus engagement rate could be decreasing, but that doesn't say anything about the total average engagement of Instagram posts, which might be increasing. Possible reasons engagement rate is decreasing (but overall engagement rising):

1) The people who followed your brand in the early stages are your most enthusiastic fans and most likely to engage with your posts. Followers that hop on the bandwagon are less likely to engage, thus lowering your engagement rate. In effect, over time, your follower count will increase, but new followers will increase the denominator (number of followers) but won't increase the numerator (engagement).

2) Perhaps, there's been a rise in automated followers. Thus, your follower count has been increasing but most of it are bots, thus your engagement rate is decreasing.

3) Perhaps Instagram might be pushing more people to follow brands they don't want to engage with. Whether it's through algorithmic recommendations, or more ads that tell you to follow a brand.