After doing some more research I am not sure that it’s always possible to derive a public key knowing only the evaluation key; it seems to depend on the actual FHE scheme.
So the trilemma may be unaffected by this hypothetical. There’s also the question of duplication vs. unification for an observer that has the option to stay at base level reality or enter a homomorphically encrypted computation and whether those should be considered equivalent (enough).
On a recent re-read I think I understand a bit better.
It’s true that individual humans can’t realistically avoid giving in to threats or even accidentally threatening others, but institutions can commit to it as a legible position, e.g. “we will not negotiate with terrorists”.
If an irrational entity has the ability to unilaterally destroy the universe then it’s probably going to get destroyed anyway, so it makes more sense to follow through on precommitments in the real world and in counterfactuals to coordinate with actually rational agents.
I think the key is that if we all went MAD legibly at the same time then things would work out a lot better. And refusing to give in to threats doesn’t necessarily mean destruction, it can be as simple as collectively refusing to pay ransomware attackers even though it is currently more expensive, in the expectation that eventually it will be less expensive.