Regarding the first question: We are making an argument here about what kind of advice we would want to give to people, and we are also considering a hypothesis under which most people aren’t “conscious”. Using a functionalist philosophy of mind, perhaps we can say that we cannot expect to change the behavior of non-conscious people by giving them advice. So then maybe there is no reason to want to advise anyone against updating in favor of a simulation hypothesis.
On the other hand, there is the hypothesis that everyone is “conscious”, but we are in a simulation in which one particular person has good things happen to them. In that case, every time someone wins the lottery, we want to update in favor of a simulation hypothesis under which that person is special.
Regarding the first question: We are making an argument here about what kind of advice we would want to give to people, and we are also considering a hypothesis under which most people aren’t “conscious”. Using a functionalist philosophy of mind, perhaps we can say that we cannot expect to change the behavior of non-conscious people by giving them advice. So then maybe there is no reason to want to advise anyone against updating in favor of a simulation hypothesis.
On the other hand, there is the hypothesis that everyone is “conscious”, but we are in a simulation in which one particular person has good things happen to them. In that case, every time someone wins the lottery, we want to update in favor of a simulation hypothesis under which that person is special.