I can see haircut approaches, but I’m more optimistic than you about recovery when underwater. Buying FUM is buying highly leveraged ETH: the deeper underwater, the cheaper the FUM. So I’m hopeful that bottom-feeders would materialize. If enough FUM buyers arrive to pull the debt ratio back below 100%, then USM holders can burn again - the pool will shrink, but the buffer between pool value and outstanding USM won’t: in fact, as long as debt ratio < 100%, burning USM increases the buffer size as a percent of the total pool.
But yes, there is some risk here. Especially on a big price drop which is of course quite realistic. See my latest USM post for a feature intended to mitigate this risk.