I'm starting to think that these 'we don't know the denominator' arguments are somewhat irrelevant.

E.g. it might be that 20% of cases require hospitalisation. Or it might be that there are ten times as many cases as we thought, and only 2% require hospitalisation.

But the number of people in hospital remains the same in either case, as do predictions for the future strain on the healthcare system (up until the disease infects a significant fraction of the total population).

Society responds very differently to a 20% hospitalization rate versus a 2% one. Emotion is a driving factor. The problem is panic, which will overwhelm hospitals sooner than the actual hospitalization rate. Thus a 2% rate is much much better to mitigate panic

You are more likely to die in the stampede triggered by a fire in a crowded cinema, than the fire itself.

I don't think you're making much sense here.

If 20% of a small number and 2% of a bigger number are the same number of people in hospital, the hospitals will be in the same situation. What is emotion driving? People showing up in emergency? These people will be triaged, and will not take up the most limited resource - ventilators - unless they need them.

I don't think 'panic' will overwhelm anything other than the triage nurses. This is not what you should be worried about.

To me the explanation is straigthfoward

Take any disease that kills 99% of those that get it. You are going to be a lot more scared of it, than one that kills 0.1% of infected targets. It does not matter if the overall death number is the same.

People will act far less logically in the first case than the second.

This is not about "math" it is about emotional responses and how that affects everything. As I said, you are more likely to be trampled to death than die in the fire that caused the panic.

But how strained the hospitals get has little to do with how panicked people are.

I don't care about what tugs on people's fears the most. I'm not afraid of their fear, I'm afraid of hospitals being overrun by actual cases.