Of course any additional condition makes life rarer, I'm just thinking this one might not make it rarer by as many orders of magnitude as it might look like at first glance.
Or using your numbers, 1/4 factor eliminates 750 million possible candidates. That's not a happy thought.
“Space is big. You just won't believe how vastly, hugely, mind-bogglingly big it is.”
Right now the denominator is about 10 trillion.
A single 1/10 factor makes it 1 trillion. 10-ish more factors and we're down to a small number of planets before we even consider the emergence of life and likelihood of propagation.
There are likely many more 1/10 factors: Habitable zone, diurnal cycles, billions of years of geological peace, sufficient water, a stable moon (maybe only one), a particular spectra of the star ...
all those were "well they seem to happen to 1/10 or 1/100 planets" individually. They cut down the space quickly when combined.
That's just the nature of the drake equation. It's very much a geometric series and if all factors have to line up with 1/10 odds, you only need 10-ish "vital things" to cancel basically all chance of life except earth.
And here we have a hypothesis which might be about 1/10 odds and might be vital. 9 left. Water? Diurnal duration? Spectrum of star? A billion years of peace? A moon? A magnetic field? There's potentially lots of factors.
Here's exactly what work it's doing:
Pretend there's 10s of trillions of planets. That's 10-13 zeros depending on whose estimate you trust most.
1/10 factor cancels one zero.
at most 13 factors accumulated means you have 1 habitable planet out of all those planets.
We have just hypothesized a 1/10 factor in this thread - that leaves 12 more - and I've lised 6 more off the top of my head.
It's just a fermi question - ballpark estimates like that are a way of thinking of the relative scale. A 1/10 chance seems like it leaves a lot of planets left (as you say - 100s of billions), but there are already many 1/10 factors floating around.
There are about 2.5 × 10^11 galaxies in the observable universe.
This gives us around 10^23 stars in the universe to fiddle with. Assume every star has an average of 2 planets; some have more, some have none.
This is a pretty large number to trim down.
I'd argue the Drake equation is excessively conservative. Note that when microbial life first emerged on Earth 4.1 billion years ago, the Earth's atmosphere was rather reducing, and the Sun was around 30% less luminous than it is today. There was free water, but no free oxygen, and an extremely high-pressure CO2 atmosphere.
The universe is arguably extremely young; the longest-lasting stars will only burn out around 10^13 years from now, and the universe is barely 10^10 years old. It's fair to say that many sun-like stars haven't even formed yet.