The network does. Difficulty goes up. Security goes up.
Security goes down! These nodes are all serving the designated pool.
We don't know that yet. They haven't disclosed how the mining is actually going to work. I'd guess you are right about it being a pool, but whether that is an increase or decrease in security overall is a matter of interpretation (including, relative to what?)
It is difficult to argue for benefits. It is reasonable to argue that Bitcoin is already so centralized it doesn't matter. Any case, I think the entire concept fails on the economics. Mass movements are not created from offers of incremental improvements. Humans have too many opportunity costs on their attention.
The most vulnerable market is the developing markets where people there lack enough capital for the basic things they want.