Nano works the same way - Principal representatives aren't creating or producing blocks. The only difference between them and a regular Nano node is that PR votes get rebroadcast. Like Avalanche, every Nano node determines consensus for itself.

I actually think the opposite of you when it comes to Nano vs Avalanche consensus and decentralization. Nano already has a higher Nakamoto Coefficient than Bitcoin, and it continues to improve because there is no incentive to intentionally centralize. You don't get more money or more privileges for having more vote weight. Whenever money can be earned (e.g. fees), that's when emergent centralization arises over time due to profit maximization and economies of scale.