Hmm, I still think spatially allocated servers offer the best scalability. You would just have to approach it a little differently.

Server boundaries could move based on where the population is via delaunay triangulation (instead of fixed boundaries), and servers could share high-importance information with their immediate bordering neighbours. (This would be recognized as ghost data on the neighbouring servers.) You could even go further and have neighbours share ghost data with their other neighbours at a lower fidelity/frequency.

A virtual distributed actor system could potentially be used to address any potential downtime or resource waste created by unpopulated zones.

I've been playing around with some of these ideas but haven't been able to turn them into an actual implementation, so kudos to you for actually doing it!