That's the problem. There aren't really thresholds, that "threshold" you speak of fluctuates from election to election.
Al Jama-ah qualified for a seat with 0.18% of the vote in 2019.
A solid threshold should be put in place to prevent this thing of small parties with 0.2% of the vote essentially wagging the tail of the council/legislature (i.e. instability as we've seen in GP).
Do you think it's fair and sustainable to allow a party(s) with 0.2% of the vote to do that?
Then there's the problem of cumbersome coalitions like ETH, any party that wants to form a coalition needs a minimum of 10+ parties to form one (unless two of the big parties cooperate), which is unsustainable and unstable.
You are missing the point, the 0.2% party is able to wag the tail of the council because parties who have enough seats do not want to work together, and whose fault is it? We have a bunch of children in councils who are unable to see beyond their pride and eliminate the 0.2% party.
Now you hear people moaning that COPE only has 0.2% or whatever, therefore they don't have the mandate to lead the city, using that same logic it means the parties who have the mandate is the ANC and the DA, but they can't work together so the 0.2% guy is able to take control.
You can try to legislate that away, we will start with 0.2% party but that is not going to solve the problem, the 2% party will just take over, then you legislate the 2% party away, the 5% one will take over and so it goes, when does it become anti democratic?
What is needed at local government is simple, some little bit of maturity, nothing else.