They are to be given "sufficient to live in  
  dignity," and it is appar­ently to be no business of the 
   tax­payers if a recipient chooses none the less to live  
  without dignity

Dignity is subjective ofc. If you think otherwise I can understand how you can interpret the quote in another way :)

Since dignity is subjective, how can someone (the taxpayer) have any business having an opinion on whether someone else is living with dignity?

I fail to see how the subjectivity of dignity has any relation to your claim that "What does matter is where does the money come from."

They don't have business in it. But they might find how their taxes are spent immoral from their point of view.

UBI will never solve the economic problem of "we all should be living in dignity", ours values are subjective.