RobertLumley comments on 2012 Less Wrong Census Survey: Call For Critiques/Questions - Less Wrong Discussion
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I had these same objections, but I assumed he was referencing this particular formalization.
Ah, I'd forgotten that one. That one's problematic as well, though, given that different people will value "2 billion lives saved" differently. Even ignoring issues of scope insensitivity when we're talking about numbers on this scale, for sufficiently selfish people the notion of saving lives would actually be less of a dilemma than if there was a personal cost to themselves. Or negative utilitarians might consider it a good thing if there were fewer humans on Earth, though you could possibly fix this by specifying that the disease kills slowly and painfully and causes more suffering than if the people lived normal lives, or something.