When I imagine WFLL1 that doesn’t turn into WFLL2, I usually imagine a world in which all existing humans lead great lives, but don’t have much control over the future. On a moment-to-moment basis, that world is better than the current world, but we don’t get to influence the future and make use of the cosmic endowment, and so from a total view we have lost >99% of the potential value of the future.
I was uncertain about this, but it seems this is at least what Paul intended. From here, about WFLL1:
The availability of AI still probably increases humans’ absolute wealth. This is a problem for humans because we care about our fraction of influence over the future, not just our absolute level of wealth over the short term.