It's honestly weird to realize how much I rely on people's in-depth commenting and line-quoting to keep me going motivation-wise until people hushed up after this update and I was like "wait did I do something wrong"
But I realize the current situation being intentionally kind of "what" is somewhat harder to comment on.
Yeah as MJ said the hyper-aggressive meritocracy is mostly at the top and influenced by what new Arachne is projecting back. It was a lot more mundane depending on where you were in the middle, then potentially quite awful at the bottom. But basically the necessities of existence are more or less accounted for - you never have to worry about disease, real hunger, sleep, shelter, etc, and even regular citizens are functionally immortal. This doesn't account for those who were not citizens, at which point you're in a different very bad ballgame. That doesn't really have any excuse beyond philosophical differences treating those who don't interact with the tapestry as p-zombies with no free will at worst, and mere fragments of an actual person at best. Even the most well-intentioned basically see the goal to interact with the tapestry as a form of uplift, and it would have been unthinkable then (though perhaps not in the present Fringe sector) to intentionally not uplift people.
It also doesn't account for the top, where assassinations, deaths and turnover is fast. If the old Arachne was a high person in THRONE//NEXUS, the actual governing body of the sector, then she and anyone close to her would never have been secure.
That being said spiritual and digital sicknesses were more common, and the Empire's laissez-faire behavior to the actual person on the ground and the fact it basically just demanded you follow a UN-charter like list of rules meant that for most people the Empire just...didn't really exist. What existed was the local planet or city or system, and then above that whatever actual nation/corporation/gestalt was actually running and defining their local culture, mores, rules and customs.
As you saw from that FORCE//FRINGE dossier, at the margins and boundaries even a lot of FORCE responded to the Emperor's death with 'damn, that's crazy'. The Emperor was so distant and vast, and the Empire itself so huge, that it took a long time for the ramifications to manifest.