Personally I find MWI advocates to be shockingly indifferent to the details of how worlds split. If the notion of world is to be taken seriously, it ought to be a mathematically exact notion.
This might be nice, but we have to deal with what’s actually the case. Wave packets simply don’t divide into two at one exact instant. And if “it all adds up to normality” its not clear what use there is in introducing an arbitrary definition that allows you to say that a wave function represents one world at time t and two worlds at time t+epsilon. Whatever aspects of the wave function I care about, they only change by an order-epsilon quantity during this time interval. We could introduce mathematical function that takes in a wave function and outputs a discrete integer we call “number of worlds,” but I wouldn’t care very much about the output of this function. Even if I accepted that the “number of worlds” had executed a discrete jump from one to two, the worlds haven’t diverged in any aspect by more than an order-epsilon difference.
Maybe we should call it the “Many-Blob Interpretation.” That cries out for much less mathematical exactness.
And so whole decades can pass without physicists being forced to confront the question of what the state of the unobserved electron is, or of exactly when it is that one world becomes two.
Both Copenhagen and MWI answer that the “the state of an unobserved electron” is given by its wave function. Classical intuitions might suggest that an unobserved electron ought to have a definite, if unknown, position, but that’s a failure of classical intuitions, not Copenhagen or MWI.
Your conclusion seems to be that the “repugnant conclusion” is not actually repugnant. That is, the “dystopian” world of a large population leading barely worthwhile lives is better than the original world of a smaller population leading fulfilled lives. You argue that this is possible because the larger world has more resources.
I think resources are irrelevant: the conclusion is still repugnant, at least to my ethical intuitions. A galactic civilization making full use of the resources of the Milky Way, but in which lives are just barely worthwhile, is worse than a civilization stuck on Earth and using only its resources, but thereby sustaining a small paradise. It doesn’t matter that the galactic civilization has vastly more resources.
Now, it’s almost certainly true that using the resources of the galaxy we could make a civilization with much more value than either the dystopia or the Earth-bound paradise, if we did things right. No one is claiming that the galactic dystopia is optimal, given any quantity of resources. But you need to revise your ethical theory if, of those two choices, your ethical theory prefers the galactic dystopia, and your ethical intuitions disagree.