Some redirections aren't supported (bc Mastodon isn't fully compatible with Lemmy), and sometimes it doesn't work bc of a server problem (your instance doesn't federate with that link's instance). However, FediRedirect is still in beta, open any issue here: https://github.com/ManeraKai/fediredirect.

Also, why does it require my login credentials.

For lemmy:
(Username and Password) or (jwt) are required for resolving /post and /comment. If Username and Password didn't work, go to your instance's cookies and copy your jwt.

Same for mastodon, but it only has the read:search permission (scopes aren't implemented in Lemmy yet)