Sure it would. If you had Sims that went around killing other Sims, there's no way in hell you would promote them, or use their stimulated experiences as a bases for more complex/serious projects.
I'm not deep into LLMs or AI safety right now, but if you have a bad performing AI, you aren't going to use it as a base for future work.
I was about to go to bed so I was rushing through my initial comment... I was just trying to understand the motivations for trying to create a stimulated reality... Look at the resources we spend on AI?
One would have to be rather optimistic and patient if one was to hold out hope for the humanity experiment to not be destined for the Trash bin in this scenario, with our track record.