Each unit ETH in the effective balance has the same likelihood of proposing and the same attestation weight as before.

Imagine a network with 2 real entities, one with 32 ETH and 1 validator, and another with 128 ETH in 4 validators. The entity with 32 ETH has 20% chance of selection, and 100% chance of proposing if selected, while the other entity has 80 and 100% chance for the same.

If the max EB was raised to 256 ETH, and the large entity consolidated its stake, the 32 ETH entity would have a 50% chance of selection, but only a 12.5% chance of proposing once selected, while the larger entity has 50% chance of selection, and 50% chance of proposing if selected.

Multiplying these out gives you 6.25% chance for the small entity and 25% chance for the large one. Since these don’t add up to 100% you have the “increased loop iterations” where you ping-pong between them more to decide who proposes, but with their odds of proposing normalized, the 32 ETH entity proposes 20% of the time, while the 128 ETH entity proposes 80% of the time.

The benefit of compounding rewards for solo stakers is pretty large, and their chance of proposing doesn’t fall due to a change in Max EB, only an increase of ETH being staked by others.