Sure:if the only choices are to stay in the closet or come out of the closet and lose all social relationships, and if staying closeted leads to being happier and more fulfilled than losing all social relationships, then the rational choice is to stay closeted.

Those are really big "if"s, though. I'd say in that situation it's worth devoting some resources to looking for third options.

You are generalising from yourself. This can lead to obnoxious advice.

...if he (a) told the truth about his religious views but alienated his wife and friends

I might not have been clear, but my wife and close friends already know. This might have been a reasonable path to entertain where this not the case (I guess TheOtherDave made that point below already). They are already alienated and I don't think there's much hope of "going back" or trying to preserve ignorance in the rest of the acquaintances who don't know.

(b) maintained his social relationships, mostly kept quiet about his atheism, and on rare occasions pretended to go along with other peoples' religious views?

Well, I already do the first part (keep quiet) most of the time. The "going along with" is quite difficult when it involved actions. I guess I would put it like this:

• I already don't believe in god. That's that.
• Given this, it has seemed most consistent to me to not kneel at Mass, make the sign of the cross, bow my head or lip-sync along with various prayers, and the like.
• In addition (also unstated, so you wouldn't have known my personal conclusion on this), I resolved quite early on that I'd gladly (pun!) trade happiness for certainty/alignment with the best description of "what is."

Your (a) is not possible, but that's not necessarily your fault for suggesting it as I might have been unclear about where things are. The biggest problem with (b) that I have is that it actually combines three sub-actions: 1) maintain social relationships 2) mostly keep quiet about my atheism 3) on rare occasions, pretend to go along with others' religious views

Could you make the case for #1 and #2 being dependent on #3 or explain what #3 buys me? Is it just helping with having things not socially awkward? I can understand that, but I suppose it feels quite short term. I just turned 27 and can't imagine that were I to know these people for the next 20-60 years that it wouldn't come up somewhere, somehow either from me or from the various other common relationships who are probably bound to say something about it within those 20-60 years.

Thus, it seems like it might be worse to "fake it" for as long as possible since my confidence is low that I'd 1) be emotionally satisfied "faking it" in the first place and 2) that doing this would make for a permanent social-awkwardness-alleviator.

He thinks so. And in a situation like that, if you think so, you're probably right in thinking so.