OTOH, people could seek to maximize block size on purpose, miners can just deny all tx's because they won't know if it's on purpose or accident (anonymous) and verify zero tx's at all and just continue to mine blocks. I'm just not seeing where decreasing subsidy makes any sense at all .. do you know?
It's supposed to be a soft limit, where miners don't include transactions more than the limit (so they aren't penalized) beyond a a small amount which causes a very small penalty (the penalty is quadratic -- i.e. squared -- so exceeding the limit by 5% causes only a 0.25% -- 5% of 5% -- penalty).
The small excess size of blocks indicates to the network a high demand for transactions which in turn over time causes the block limit to grow. The reverse mechanism causes it to slowly shrink during periods of low demand.
The whole scheme seems designed to avoid spam and bloat but at the same time avoid persistent scarcity of block space that would lead to high transaction fees.
This was implemented, perhaps somewhat correctly though with at least one bug, in the original bytecoin code. TFT broke it when it forked off to bitmonero and tried to fix the bug (poorly).
Since this is experimental and was never quite implemented correctly it is unclear at this point whether Monero will continue to fix it or just drop it.