They have been struggling along for years with gradually deteriorating track and rolling stock and finances and now finally the cracks cannot be papered over any more. The branch to Harzgerode is already shut with no funding for repairs, even though it's officially described as under maintenance.
Theoretically the network except for the Brocken branch is public transport, but in reality the local population uses quicker, cheaper, more frequent buses and the HSB has the occasional railcar mostly carrying fresh air, and a token loco hauled service filled with enthusiasts enjoying heavily subsidised steam.
A complicating factor is that the network is spread across three states. So Thüringen funds a frequent hybrid tram service from the Southern Terminus to the most northerly significant settlement in their state, and Sachsen-Anhalt needs to link to the Brocken but it's in no one's interest in particular to fund "the big empty bit in the middle".
Recently there is a lot of discussion locally about what the future of the HSB is, since it's clear that struggling along with endless rescue packages isn't sustainable. The HSB management has also had criticism for lack of innovation and wasting money(€15 million spent on brand new workshops which turned out to be useless for anything except storage). At one of the end of the scale you could abandon everything except Nordhausen - Ilfeld and Wernigerode - Brocken, runs trams in south and diesels with occasional steam in the north. At the other end would be investment in increasing line speeds, new rolling stock(ideally battery combined with partial electrification) and frequent services to turn into to actually useful public transport, with occasional steam specials. Either way the days of year round steam daily steam on the whole network are probably numbered.