Think about it, every decimal you allow further to settle, there are 10X more Bitcoin available. No difference from money printing other than it’s more efficient for the existing holders. Still would dilute the value. Make whatever L2s, L3s, etc you want to try and keep track of the fractions, the base layer should never do that. Satoshi knew this which is why he said the placement of the decimal point was academic.
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If I am please help me understand why. Kind of important to be clear on this mechanism I believe. 

I’m not sure how it dilutes the supply suppose you have 500 sats, you would still have 500 sats no matter how many units someone else divides their sat into, as long as nobody can create a new sat it wouldn’t be increasing the supply, there’d still be 21M bitcoin.
I respectfully think that you’re confusing between two different concepts but if I’m wrong I’d love to know how as well.