I agree with that description of FDT. And looking at the experiment from the outside, betting at 1:2 odds is the algorithm that maximizes utility, since heads and tails have equal probabilities. But once you’re in the experiment, tails have twice the probability of heads (according to your updating procedure) and FDT cares twice as much about the worlds in which tails happens, thus recommending 1:4 odds.
I agree with that description of FDT. And looking at the experiment from the outside, betting at 1:2 odds is the algorithm that maximizes utility, since heads and tails have equal probabilities. But once you’re in the experiment, tails have twice the probability of heads (according to your updating procedure) and FDT cares twice as much about the worlds in which tails happens, thus recommending 1:4 odds.