If our technology is limited so we can never see beyond something, why even propose it exists? Bell’s theorem also demonstrates that if you do add hidden parameters, it would have to violate Lorentz invariance, meaning it would have to contradict with the predictions of our current best theories of the universe, like GR and QFT. Even as pure speculation it’s rather dubious as there’s no evidence that Lorentz invariance is ever violated.

My issue it is similar: each “layer” of simulation would necessarily be far simpler than than the layer in which the simulation is built, and so complexity would drop down exponentially such that even an incredibly complex universe would not be able to support conscious beings in simulations within only a few layers. You could imagine that maybe the initial universe is so much more complex than our own that it could support millions of layers, but at that point you’re just guessing, as we have no reason to believe there is even a single layer above our own, and the whole notion that “we’re more likely to be an a simulation than not” just ceases to be true. You can’t actually put a number on it, or even a vague description like “more likely.” it’s ultimately a guess.

I have never understood the argument that QM is evidence for a simulation because the universe is using less resources or something like that by not “rendering” things at that low of a level. The problem is that, yes, it’s probabilistic, but it is not merely probabilistic. We have probability in classical mechanics already like when dealing with gasses in statistical mechanics and we can model that just fine. Modeling wave functions is far more computationally expensive because they do not even exist in traditional spacetime but in an abstract Hilbert space that can grows in complexity exponentially faster than classical systems. That’s the whole reason for building quantum computers, it’s so much more computationally expensive to simulate this that it is more efficient just to have a machine that can do it. The laws of physics at a fundamental level get far more complex and far more computationally expensive, and not the reverse.