Disclaimer: I stake from home.
Can you explain this point in more detail?
It’s clear that at the equilibrium of ~every ETH being staked, home stakers are further-disadvantaged-than-today relative to holding LSTs (as their hardware costs are not offset by the very low levels of issuance). But this proposal is specifically meant to be a stopgap until a targeting policy is instituted, so this hypothetical equilibrium is beyond the span of time that this proposal aims to address. It seems to me that the correct span of comparison is Ethereum 2-3 years into the future, where this proposal would imply lower real yields.
I believe this is where the concerns from home stakers in this thread come from. They would be seeing their yields compress further in the short/medium term, and rightfully worry that this means less incentive to solo stake. This also means a lower influx of new home stakers (lower yields), and less development of home staking software (worse UX). Staking providers, meanwhile, can continue to scale operations and UX profitably at lower real yields.
(Ultimately, in the equilibrium, it is my belief that Ethereum cannot simultaneously (a) preserve a large base of home stakers (who cannot amortize costs as efficiently as large providers) and (b) reward all stakers equally. This is why I’ve proposed to make staker information legible to the protocol.)