What you present is the basic fallacy of Pascal's Mugging: treating the probability of B and of C as independent the fact that a threat of given magnitude is made.

The prior probability of X is 2^-(K-complexity of X). There are more possible universes where they carry out smaller threats, so the K-complexity is lower. What I showed is that, even if there were only a single possible universe where the threat was carried out, it's still simple enough that the K-complexity is small enough that it's worth paying the threatener.

No commenters have engaged the argument!

You gave a vague argument. Rather than giving a vague counterargument along the same lines, I just ran the math directly. You can argue that P(C|E) decreases all you want, but since I found that the actual value is still too high, it clearly doesn't decrease fast enough.

If you want the vague counterargument, it's simple: The probability that it's a lie approaches unity. It just doesn't approach it fast enough. It's a heck of a lot less likely that someone who threatens 3^^^3 lives is telling the truth than someone who's threatening one. It's just not 3^^^3 times less likely.