That's close to the Boltzmann Brain hypothesis, which could be true. Once again the simulation hypothesis doesn't attempt to address how the simulation is actually implemented... it's a bayesian probabilistic argument that simply takes observations about the ratios of power/computation over the last century of computing, the likelihood that advanced civilizations would create ancestor simulations and from that it draws the likelihood that anyone alive today is living in a nested ancestor simulation---and that value is closer to 1 than all the others.
Insofar as how that likelihood or our acceptance or understanding of it should affect our behavior or our policies, it suggests nothing. All it does is attempt to explain some of the prevailing paradoxes in the Anthropic Universe, which is also what the Boltzmann Brain attempted to do when thermodynamic laws very clearly suggested that 99.99999% of all time unto infinity should be spent in the absolute darkness of total entropy---then why is the universe full of stars, light and life.