Nope. I don't think ignoring causality to such extent makes sense. Simulating many instances of humanity won't make other risks magically go away, because it basically has no effect on them.
Yet another example of how one can misuse rationality and start to believe bogus statements.
It's counterintuitive, yes, which does not make it acceptable for you to fart out some mockery and consider the argument closed.
A self-modifying AI is built to serve humanity. The builders know, of course, that this is much riskier than it seems, because its success would render their own observations extremely rare. To solve the problem, they direct the AI to create billions of simulated humanities in the hope that this will serve as a Schelling point to them, and make their own universe almost certainly simulated.
Plausible?