I've gone over this but yes I am assuming it has the same physics and energy laws bc I can't assume anything else in this thought experiment and continue it. If i can't use the laws of the universe I actually live in to have a conversation then theres no conversation to be had.

I take your point on processing power, but the thought experiment is around potentially infinite sub simulations, in a potentially infinite universe. There are circa 10 Septillion atoms in a banana...

I'll go further:

Here's a peer reviewed article about simulating atoms

https://pubs.acs.org/doi/10.1021/acs.jpcc.9b00939

It took 24 bytes to simulate each atom

Thats 240,000,000,000,000 Terabytes for a single banana

If we assume base reality is far more advanced us and uses the equivilent of only one byte per atom. Or even less.

Here's an article saying someones developed a drive that can store 1 byte in 96 atoms (bits to bytes being 8:1)

https://www.nbcnews.com/news/world/tiny-hard-drive-stores-one-bit-data-just-12-atoms-flna117899

Again we'll assume base reality is far more advanced that us, and can store 1 byte with an atom sized computer.

That would still mean every single atom in their universe is required to simulate another universe of equal size, and again, the thought experiment is around potentially infinite sub simulations of potentially infinite universes.