It clearly does not work in any circumstances. We over-emphasise the likelihood of rare events already, saying that something has even odds just because it is c

It clearly does not work in any circumstances. We over-emphasise the likelihood of rare events already, saying that something has even odds just because it is conceivable that it could happen is completely useless. Which is not to say that you should not plan for extremely rare events, but you certainly should not make decisions assuming they are likely to happen.