if wizards were public about their abilities, a higher proportion of wizards (even low-powered wizards) in the muggle population would be identified and trained

There's no such thing as a "low-powered wizard", and all wizards in Britain are automatically detected magically (at birth?)

It is implied that in HPMOR there are - presumably third-world? - countries where they "receive no letters of any kind". So potentially a complete breakdown of the masquerade might allow the least sane Muggle governments to track down and kidnap wizarding children for their own use. (I'm a little confused by this, though, since spontaneous untrained magic should be a serious issue if muggleborns aren't being dealt with.)