Do I misunderstand or are you sprouting out bs scenarios?
If I get the whitepaper correctly then in the mentioned scenario (everyone picked themself as the new witness) we'll get the DAG looking like this:

There is a chance I've got the whitepaper wrong, of course. So far noone has explained what will happen.
It looks nice but won't happen. Odrak explained this above by quoting the whitepaper:
Incompatible parents are still permitted, but they have no chance of becoming best parent.
which means that such units will not be on the main chain but they still get descendants and get confirmed.