Strong light-matter coupling can modify the photochemistry of molecular systems. The collective dynamics of an ensemble of molecules coupled to the light field plays a crucial role in experimental observations. However, the theory of polaritonic chemistry is primarily understood in terms of single molecules, since even in small molecular ensembles the collective dynamics becomes difficult to disentangle. Understanding of the underlying ensemble mechanisms is key to a conceptual understanding and interpretation of experiments. We present a model system that simplifies the problem by mixing two-level Mg atoms with a single MgH+ molecule and investigate its collective dynamics. Our focus is on the modified chemical properties of a single diatomic molecule in the presence of an ensemble of resonant atoms as well as the structure of the major and intermediate polariton states. We present quantum dynamics simulations of the coupled vibronic-photonic system for a variable size of the atomic ensemble. Special attention is given to dissociative the dynamics of the MgH+ molecule.