Your intuition is correct. According to [1] it can take 2 hours of browsing and interacting with transphobic content to get straight into neo-nazi content. Many people don't ever see such videos, and don't think it's on the platform - it does become a very hypertuned hyperfocused echo chamber.
[0] https://www.mediamatters.org/tiktok/tiktoks-algorithm-leads-...