The problem with Pascal's Wager isn't that it's a Wager. The problem with Pascal's Wager and Pascal's Mugging (its analogue in finite expected utility maximization), as near as I can tell, is that if you do an expected utility calculation including one outcome that has a tiny probability but enough utility or disutility to weigh heavily in the calculation anyway, you need to include every possible outcome that is around that level of improbability, or you are privileging a hypothesis and are probably making the calculation less accurate in the process. If you actually are including every other hypothesis at that level of improbability, for instance if you are a galaxy-sized Bayesian superintelligence who, for reasons beyond my mortal mind's comprehension, has decided not to just dismiss those tiny possibilities a priori anyway, then it still shouldn't be any problem; at that point, you should get a sane, nearly-optimal answer.

So, is this situation a Pascal's Mugging? I don't think it is. 1% isn't at the same level of ridiculous improbability as, say, Yahweh existing, or the mugger's threat being true. 1% chances actually happen pretty often, so it's both possible and prudent to take them into account when a lot is at stake. The only extra thing to consider is that the remaining 99% should be broken down into smaller possibilities; saying "1% humanity ends, 99% everything goes fine" is unjustified. There are probably some other possible outcomes that are also around 1%, and perhaps a bit lower, and they should be taken into account individually.