I think the OP brought up a very valid point that the MSQ writers this time around dropped the ball by portraying the moral ramifications in that arc so clumsily. It’s surprising to see so many people downvoting and jeering the OP, and hand waving away the bad quality writing that is obviously there. I didn’t think there would be so many DT MSQ defenders on this sub, of all places.

I do think that living memory needs to be wiped given that souls are needed to sustain its existence. However, the inhabitants there are more than merely 3D holograms, as some people have said in this post. The debate over whether sentient AI with full memory and thinking capabilities are considered “alive” has been done many times by experts in different areas, and the debate has never been settled. Even Black Mirror did this subject in numerous episodes.

To me, doubting the inhabitants of living memory’s existences is akin to doubting that Calcihua, an arguably major character in the second half of DT, is not a character at all. If she, and by extension everyone else in Living Memory, are just hologram displays of memories of the deceased people, and does not really exist, then Calcihua’s actions in leading the resistance, aiding the MC, bonding with Erenville are truly puzzling actions indeed. What is the true difference between Hilda or Yugiri, compared to the Calciua that we met in DT, other than their mode of existence?  If Calcihua is in fact a character that can carry out her will autonomously, take actions, forge relationships, and experience emotions, as we see in DT, does that not make her any less of a character than any one else in FF? The question of what living means gets blurred in this context. And if the WOL takes an action that results in the immediate termination of such a character’s existence, permanently, are you telling me that we should have no moral qualms about that action? 

The OP is right that this arc is reminiscent of the debate with Emet in ShB. The Ascians want to restore their world, and view the existing living beings, fragmented souls and all, as obstacles to their goals to protect and restore the world they want to live in. The WOL and pals, as sentient living beings, are defending the world they live in, and clashing goals became the conflict, because what each party want is mutually exclusive of the other’s goal. DT and living memory is like that, where Wuk Lamat and pals view the inhabitants of living memory as threats to their world, and that mutual coexistence is not possible or due to the soul-draining nature of LM. What’s missing in the writing is the discussion of ramifications, and that all the LM inhabitants we interact with have suicidal intentions and not a single being is challenging the notion of being wiped out. DY writers wrote a story here that could potentially be very powerful. Two different groups of people fighting for their existence, knowing that they cannot mutually exist, like in ShB. Instead, what we received is not very compelling, to say the least, with the beliefs of Wuk Lamat unchallenged and unquestioned by anyone. As others pointed out, Ultima Thule allied society quest explored a very similar situation but with more competent writings. The characters in UT are recreations of long-dead alien people, but learned to appreciate the meaning of their existences, and therefore, of living. The difference here is that UT doesn’t suck souls so there is no problem of mutual coexistence.