How can a dilute acid dissociate more than a concentrated one? (Ostwald dilution law)
A dilute acid has more solvent molecules to interact with than a concentrated acid, and thereby has more frequent collisions with the solvent. You can think of the dilute acid as "drowning" in the solvent.

A concentrated acid, by contrast, interacts more with other acid molecules, and therefore less with the solvent which dissolves it.

A concentrated acid will typically have more total dissolved molecules than a diluted acid simply because there are more of them, but it will have less as a fraction of total number of acid molecules; i.e. a weaker affinity for dissociation.

In short, $\alpha$ describes affinity for dissociation, not total dissociation. "Better", not "more".

Note that a higher $K_a$ corresponds to a stronger acid, so it makes sense that stronger acids will have a higher affinity for dissociation.