Well, I'm going off someone who is involved in the game in Brazil. He also notes that the CBRU only recognizes 6 states in their Union and thus only gather their official numbers from those states.
I know some players of the Brazilian national team called: "Los Tupís" (It's the name of a tribe of aborigines native to South America) and it's true in part. There are more than 12k players in Brazil, but most of them are casual players involved in the program: "Get into rugby" running by World Rugby. They play a few times per year, so they aren't regular rugby players and aren't involved in the game all the year.
Brazil is one of the largest countries in the world, similar to Australia. There are vast of part of the territories that aren't populated. The centre of Brazil is a huge desert of people like Australia, there is the Amazonia, the Amazon jungle. So to connect the big cities in Brazil is very dificult by the long distances. Brazil has big cities in the north but aren't connected with the important cities that are in the southeast as San Pablo and Rio de Janeiro.
In that sense it's similar to Australia, in the southeast are the most important cities of the country as in Australia: Sydney, Brisbane and Melbourne. If you want to connect with other cities you have to travel the same distance between Sydney and Perth or Sydney and Darwin, so some cities are very different in their customs.
Brazilian rugby is established in the southeast, in the most powerful cities, but it is still a small code. Expanding the code to such distant cities is not economically rewarded, so they prefer to keep their resources in the main area. Similar to the current situation in OZ, where rugby is established in NSW, QLD and ACT. And it's difficult to expand the code to other states as far away as Western Australia.
