So in those break-down situations, my inclination is to refrain from asserting that a person believes, or fails to believe, something. My preference is to try to understand his behavior in terms of a probability that he has assigned to a possibility, rather than in terms of believing or failing to believe.

I think this is the most common position held on this board - that's why I found your model confusing.

It seems the edge cases that make it break are very common (for example, taking precautions against a flip of heads and a flip of tails). Moreover, I think the reason it doesn't work on probabilities below 50% is the same as the reason it doesn't work on probabilities >= 50%. What lesson do you intend to impart by it?

As an aside, my understanding of Pascal's wager is that it is an exhortation to seek out the best possible evidence, rather than to "believe something because it would be beneficial if you did" (which doesn't really make a lot of sense).