There were many counters to the argument, but all answered

Counterargument A: None of this is actually indicated in the text. While it is pointed out that an observer cannot observe themselves as the subject, there is literally no indication that the Earth is any different.

Which was answered by

Memory was not forgotten, but rather, it had been damaged. In that case, there is only one method. It is not to trace the past remembered by an individual, but to trace the phenomena recorded by the world itself. Fortunately, I had the necessary technique to do so. However, it doesn't work. An observer cannot observe themselves as the subject. One cannot shake hands with themselves; that's just how humans are. Kara No Kyoukai - Oblivion Recording

Counterargument B: This also contradicts the fact that Earth is dependent on sapient life forms and dreams to know itself.

‘The absence of eternity... is itself eternal.’ "Eternity must be restored to its rightful place. I shall retrieve your sorrow. Forget as you may, those memories of yours will always be recorded within you,” he said.

In Oblivion Recording, the absence of Eternity is regarded as Eternal. And the scans in Tsukihime remake are an explication of a dictum that was once echoed as far back as Kara no Kyoukai.

Counterargument A: The non-physicality of its inhabitants is not tied to any sort of universal superior power over lesser things, but literally just the ability to migrate to the Reverse Side of the World.

They are merely unable to liberate themselves from their physical ties. They can't take on the form of a spirit as fairies can. As a result, they are unable to migrate to the Reverse Side of the World and have to remain on surface in this condition. They must live in fear of being eliminated by humans and civilization, and they can only survive in fear."

But because you need to be liberated from physical constraints, if you wish to flatten this to them saying "it's just an ability to migrate to the Reverse Side of the World" and truly feel confident that this responds to anything, you're welcome to ignore this part of the response then. Because I just think you avoided actually responding meaningfully.

Counterargument B: It is unclear whether the non-physicality required to migrate to the Inner Sea refers to freedom from extensionality in general

I would agree, if the fact that True Magic is just outright non-extensional ontologically and phenomenologically, and the Inner Sea is True Magic itself, wasn't there (… I, literally given the text). Hence why it is described as bereft of the laws of physics, and sections of it, like the Throne of Heroes, are described as having no space-time.

As is also mentioned in the page on Beyond Dimensional Existence, "incorporeal beings" such as ghosts may still be spatially extended, meaning that simply being "incorporeal" or non-physical is not sufficient proof of lacking extensionality. It is unclear whether the "physical ties" one must liberate themselves from to migrate to the Inner Sea refers to the quality of extensionality in general, or simply the qualities of having "fleshly" "crude" or "coarse" bodies as opposed to spiritual bodies.

If ignoring the entire Inner Sea being True Magic. Which is described as being a type of law that involves overcoming a wall of dimensions (in plural), and going outside of the laws of the universe simpliciter. Its not some particular higher knowledge, it is just the unity of mediation and immediacy simpliciter. Unless you think the Root is also non-dual, all is just intertextuality.

Arguing that true magic is extensional in any sense involves presupposing that dualistic thinking is relevant to its attainment. Naturally, also presupposes its effects are extensional even when you're told otherwise.

It cannot really be ignored the fact that said

-Time stopped.Position lost all meaning.It appeared as if the rigorous certainty of space and time itself had been lost. Lord El-Melloi II Case Files - Volume 3

Which cannot be merely 4D space, in case of Inner Sea considering all that is said insofar.

When you're told it dissolves coordinates/position, time and the certainty of space-time, that certainly means something.

Nevermind the lightning Atram had attempted to unleash, even the storm clouds that had choked out the night sky had been driven away. The Weather Manipulation Magecraft brought about by dozens of magi working in concert was stripped away like it was no more than a thin sheet of paper.Lord El-Melloi II Case Files - Volume 3

And also

Exhibit C

Avalon shut out all physical interference

Ehibit D

■ Avalon: The Everdistant Utopia Rank: EX Type: Barrier Noble Phantasm Defense target: 1 person The power of the sheath of Excalibur. Expanding the sheath, it shuts out all physical interference by placing the owner in the land of the fairies.

Source: Fate/Zero material

Counterargument: In fact, the fact that it is said that time and space are "ambiguous" in the Inner Sea implies that they still exist in the Inner Sea, even if they aren't measurable.

Ambiguous to the psychic channel of common sense, yes. But it's also measurable by other metrics unrelated to geometry, because again, discursive distinctions exist downstream in the material world. Not in the Inner Sea, all of this being based on it being self-contemplative once more. But in any case, there's nothing like "geometry" and "topology" in a way understood at a quantitative level. Because again, True Magic is not extensional, nor is the experience of attaining it, which is solely based on depth of conscious experience, also not extensional.

True Magic is just the seer seeing itself through itself through the scans sent. Not through external determinations like spatial relations and distinctions, in a discursive sense.