Yes, I think that seems reasonable.
With a regular minipool, we can be certain that there is at least 16 ETH collateral at all times. What I mean by UEB minipools going underwater is this: RPL ratio can change over time, in particular if I start a UEB minipool with the RPL equivalent of 17.6 ETH today, it could be less than 16 ETH tomorrow if the ratio drops enough. I don’t think we have a good way to deal with this situation (no forced exits possible). So if the design is just that you need RPL equivalent of 17.6 ETH when you start the UEB minipool, it is strictly more risky than a regular minipool. We can reduce the risk of a UEB minipool going underwater by requiring more than 17.6 ETH, but it will never be as good as just using 16 ETH instead.
Not sure what the 1.3 RC2 changes with regards to auctions, but I am talking about the auction mechanism needing a new design, including smart contract upgrades, as I am trying to discuss in: RPL Auction Mechanism Design
I didn’t get a lot of answers from the team, but it seems like they agree that the mechanism needs work if we want to lean on auctions more. I think using 100% RPL as collateral qualifies.