poiuyt comments on Circular belief updating - LessWrong
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The apparent paradox is resolved as long as you note that P(Daisy thinks Dark does exist|Dark does exist) > P(Daisy thinks Dark doesn't exist|Dark does exist).
That is, even if Dark does exist and does want to hide his existence, his less-than-100%-effective attempts to hide will produce non-zero evidence for his existence and make the probability that Daisy will believe in Dark go up by a non-zero amount.
P(Daisy thinks Dark does exist|Dark does exist) > P(Daisy thinks Dark doesn't exist|Dark does exist), then Dark does a very poor job of causing people to believe he doesn't exist- he would do better by not existing!