Glad to hear that you have someone or something to love comrade. We all need love in our lives. To a long fruitful and happy existence!

For example we could all be the exact same student living every single life as every single person

this is the metaphysical concept of universal consciousness.

I can think of many good reasons for why a futuristic capitalism would simulate the current Earth. Simulating the Earth might not be profitable on current hardware; however, in the future, it could be trivial.

1. Simulate how capitalism could succeed over communism.

2. Even in our current day, we are running out of data to feed to AI to keep improving them; that is to say, to generate infinite new data for training AI or to sell among capitalists.

3. Capitalists could be simulating the Earth specifically as a form of cryptocurrency, wherein, to keep profits high and the workers of the real Earth enslaved, they must sell digital products like NFTs to NPCs.

4. They could also, as said above, be a form of torture where they implant a prisoner into the life of one of the most downtrodden.

5. It could also simply be a simulation to figure out wealth extraction—how best to exploit the population.