I agree that the BU FAQ is incorrect - there always has been a fee market and always will be a fee market, no matter how slack it may be at any given point. The only time it is readily apparent is when there is extreme stress on the system.
The point being that yes the risk of another miner winning the block increases, but the miner's income commensurately (proportionally) also increases, so statistically the miner loses nothing by creating a larger block and thus is leaving tranactions fees on the table for some other miner to take if the miner doesn't make a larger block. However presuming some transactions pay less per byte than others (and higher valued transactions can afford to pay more per byte), the economic converse effect occurs wherein the miner has the incentive to make the smallest block possible or below the size where propagation latency is linearly proportional to block size (i.e. the latency that is a constant factor independent of data transferred), which is again
not a free market limit on block size and not a fee market. So the same Tragedy-of-the-Commons occurs that has always been argued as the problem with unlimited block size, in that the power vacuum must be filled by a collusion of miners which pool their (at least 33% of the systemic) hashrate and selfish mine against the rest of the network enforcing a block size which maximizing their profit which is basically the highest level of fees x volume the market will bear. I had even argued (I claim successfully) against @ArticMine that Monero's algorithmically adjusting block size suffers from a similar Tragedy-of-the-Commons outcome (ultimately due to the power-law centralization of mining economies-of-scale). No matter how you slice and dice it, Satoshi's PoW will become centralized so choose your poison how you want to get there,
Bitcoin Core (aka Blockstream) funded by banksters or Bitcoin Unlimited (with insufficient developer resources) lead by technical incompetents such as Roger Ver. This is why I designed (a yet unpublished) solution for blockchain consensus which is not PoW and not PoW (something totally new, which I am working on now).
There is
no free market limit on block size and no fee market, yet miners will enforce
the highest level of fees x volume the market will bear? Unless my interpretation of what you stated is mistaken, this appears to be a contradiction.
Miners are the fee market makers, but they are beholden to market forces external to Bitcoin. The free market still determines the limits one way or another, directly or indirectly.
Finally: yes, centralization is still inevitable with either BC or BU.
Let's put that to a test right now. I am going to refute you and let's see if the market is paying attention, because
miners damn well better be paying attention.
Perhaps you haven't noticed that before I made my shocking math post, the Bitcoin price was declining, since I made my post then the BTC price has risen 5% and
miner support for BU has declined. I think the market is paying attention and that is why I am following up with more explanation (when I should be sleeping instead because it is 2:30am where I am and I am on medications).
Bitcoin had a high-volume low on the 18th and broke up through an hourly downtrend on low volume over 9 hours ago. It broke up through a second downtrend only a few hours later, again on low volume. I bought at $988 based on the charts, before reading your BU critique. It was time.
Additionally, the markets have risen at times when both BC and BU were gaining. They've likewise fallen in a similar manner. While your analysis is important, I am far more inclined to think that forces external to Bitcoin have a much greater weight on price than the BC/BU issue.
As for the BC/BU debate generally... due to centralization, I expect Bitcoin to rapidly become a beast of coercion and control instead of the
territory of freedom that held for several years. Regardless of technical merit on either side, the actions of "core" have been beyond reprehensible. A doctor with the greatest ability and skill eventually amounts to nothing if his bedside manner is derogatory and dismissive. The core team chose to stand on a platform of abuse and control and that has resulted in market forces ultimately resisting the proposed solution.
From what I see the price is headed higher despite the division, not because one side or the other is gaining. For every person engaged in the debate, there may be a hundred using the system that remain unaware.