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Notes -
Sure, very likely. The point I was trying to set up with my toy blacksmith example was not just a population group being shoved into a niche ("you're all blacksmiths now") but also that the group had a motivation to lean into the niche ("paying a lot for the best swords"). If a group highly values excellence in a particular area, then individual excellence in that area should be a correspondingly strong status boost.
In your phrasing, crushing status plausibly should lead to lower average performance, but you'd still likely see internal measures of status within the group, emigrants that seek status elsewhere, or other reactions.
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