Hey there, welcome to the forum! Hope you stick around and make more posts.
I always thought of that as an interesting diversion from the plot, it seems to be as good a theory as any other, but I feel like there's no real reason to accept it over any other, as Dominic says in that scene, these sort of arguments about things that are so far outside our comprehension just become circular and almost pointless. I never really connected with that part of the book.
It is however similar to a scene in another book, The Way of Kings by Brandon Sanderson, which came out way later, so it's obviously an idea with substance, there's a one off character who follows a religion that believes the universe was one entity similar to this theory, and that it realised that it couldn't actually experience anything, so split itself into everything to form experiences, so the character wants to hear everyone's story to add as much experience to the universe as he can when he dies. It's as I said an almost identical theory, but I liked it because it showed the plurality of beliefs on the world, not just a random diversion into a thought experiment about the meaning of the universe that has no real bearing on their lives.