Both seem like issues to me? Either your paychecks are being adjusted for inflation (in which case they could be adjusted to the Bitcoin price) or they are not adjusted for inflation and each check is smaller than the last.

Then you swap it instantly to USD, which is part of the implementation.

So citizens can chose. Conservative ones pick USD for its stability, others may pick BTC. Which has appreciated by 200% for 12 years straight, but hey, who's counting.

Or, mix it up. 75% USD, 25% BTC. So...what is the problem again?

The problem is it is only advantageous to hold BTC for those that can assume that risk. It's not being "conservative", they have no choice. If you're living paycheck-to-paycheck and the price collapses while you're sleeping, how do you eat the next day?

This ultimately means the rich get richer and the poor get poorer.

Real green USD or just USDT? Can they get the USD in cash? What is the extraction fee?

Real dollars, and zero.

Do you want your weekly paycheck in an inflationary or deflationary currency?

I don't really care if it's inflationary or deflationary, as long as the rate of inflation/deflation is fairly small.

Either, whichever is most stable.

Let's start sending your weekly payment checks in Zimbabwean Dollars, and see how much of that matters.

Zimbabwean dollars were highly volatile.

Getting your paycheck and not knowing it'll be worth roughly the same amount next week when rent is due is a serious problem.