I think the entire problem is that I had epg-pinentry-mode set to nil, I changed it to 'loopback and now things seem to be working properly. I don’t understand why lem.el uses a passphrase with GPG while it seems like mastodon.el doesn’t. Let’s see if posting this via lem.el works!

EDIT: Yep, it worked and editing comments works too! By the way, tons of unbound commands like lem-ui-edit-comment deserve key bindings.