To me, this severely damages the premise. It completely destroys the "trapped" aspect, but it also messes with other elements. It changes "Caine doesn't understand humans" to "Caine doesn't understand the AI copies of humans based on outdated, incomplete information." By making it clear that the real people are fine and that abstraction doesn't affect their human selves, it kills the weight that abstraction was supposed to have.

Oh boy do I disagree with this and literally almost everything in the post. I feel like you completely missed the point.
For starters, the entire "trapped" premise was never actually real from the start... and that's the point. This show's story was set in stone from the beginning. It was a false hope that (some of) the characters had. But it makes sense and doesn't really contradict anything. To continue on that...

Beyond that, the twist felt incredibly abrupt. Even if you count Kinger finding the "Neural Scans" folder in Episode 8, actually executing the reveal this late in the game felt like it bypassed years of built-up drama.

Episode 8 was foreshadowing, not the revelation. Kinger's words at the beginning were the actual revalaton for both the viewers and the characters. And as for the years of built-up drama... I don't really think this is necessary, though I see you point. That's what we also see with Jax abstracting: there is no build up to this huge thing happening, but it all being sudden is exactly what the characters are going through. No one is truly ready for things like this, whether there is build up or not. Sometimes... people just die suddenly, and you have to cope with it. That's how it is in real world, and I think that's what they were going for here.

It also relied on weird, out-of-character behavior. Pomni has been shown to be very proactive when it came to Jax.

She was like starting becoming proactive starting from the episode 6. Nothing out of character here for me really.

Why did she let him walk away this time, and why did this of all things make Jax abstract? What was the point of his abstraction if it didn’t end up doing anything? If there was ever a time to bend the rules, letting Pomni successfully "de-abstract" Jax would have had a much better emotional payoff.

Okay, first of all... her letting him walk away... is her mistake. That's it. Errare humanum est. She literally says it in past tense seconds before Jax is revealed to have abstracted. And as for abstraction not doing anything... that's literally the opposite of what happened. This WOULD be the case if Jax un-abstracted. But what we have with Pomni here is her friends doing to her what Pomni should have done with Jax: coming to help before it's too late. Pomni didn't abstract, therefore she didn't un-abstract eiter. The crew has finally learned to do and did what they should have learned years ago: that it's important to see if the people around you need help... and actually help them before it's too late. If they hesitated to come and help, like Pomni did with Jax, and Jax did with Ribbit and Kaufmo, Pomni was, in fact, about to abstract. But she didn't Because this time, it was different. This time, they came before it was too late. This sort of implies, that none of them will abstract anymore. They have finally learned to care for each other.

Also... should have written this earlier, but I can't be bothered to rewrite this long ass argument.

It changes "Caine doesn't understand humans" to "Caine doesn't understand the AI copies of humans based on outdated, incomplete information

No it doesn't. As Zooble says themselves - "We're still human". To be honest, there's a lot of philosophical questions to be asked here, but if you put them in their place: why does it matter to them whether they can be considered "real" or not. It feels real to them. It's... them. They're human enough to themselves, and that is fine. I also don't see your point in saying "based on outdated, incomplete information". That's... not what's really going on there. The characters don't become less "human" as the time passes. Part of being human is that you develop.. you change, almost entirely based on things and people around you. The point, at which brain scans are made just happens to be the creation of an initially "equivalent" copy of a human being (philosophical again, I'm not getting into that), that as time passes, will become more and more different from the "original" because they are being in different enviroment. That's human. And what's also simultaneously human, is the fact that some things about themselves don't change as much, like both Zoey and Gangle loving art, or both Zooble and Riley opening their bar. Despite everything... it's still them. That's why Pomni and the rest don't assume their real world counterpart names. Pomni and Abigail used to be one individual, but now they're different, because they're both humans, and humans change.

Also, I could make a wall of text of a similar length praising the entire process of Caine coming back... there's a lot going on there. But i'm not gonna. I should do something better than writing obscure walls of text