Thus there would be greater variance vs the 99.99% rate of XPs, but the added variance is also favoring the already favored team, so this is bad for the underdog - am I off on this, assuming that the better teams really did convert the 2 pt conversion at a higher rate?
If better teams make 53% of their two-point conversions while worse teams make 47%, the change should still favor the worse teams.
Using my previous example for illustration, suppose the better team scores three touchdowns and a field goal while the worse team just scores three touchdowns.
Under the current scoring system, it's almost always going to be a final score of 24-21, with the better team winning. In order for the worse team to win, it's going to have to make three two-point conversions (which it will normally not even try to do), and even then, either the better team will have to miss a point after attempt, or the worse team will have to win in overtime. The worse team will win about 0.01% of the time if we are generous.
Under Chase's system,
the better team will have a 53% chance of making each two-point conversion. That means it will score 21 points about 10% of the time, 23 points about 35% of the time, 25 points about 40% of the time, and 27 points about 15% of the time.
The worse team will have a 47% chance of making each two-point conversion. That means it will score 18 points about 15% of the time, 20 points about 40% of the time, 22 points about 35% of the time, and 24 points around 10% of the time.
With those probabilities, the worse team will win about 8% of the time. (It can win 24-23, 24-21, or 22-21.)
So if each team scores three touchdowns and the better team scores a field goal, the rule forcing each team to go for two helps the worse team tremendously even if the worse team converts two-point conversions at a lesser rate. You'd have to make the difference in two-point conversion rates really extreme (e.g., the better team converts 99% of the time while the worse team converts 1% of the time) in order for the worse team not to benefit from the "always go for two" rule.
Obviously, there are other possibilities besides the better team scoring three touchdowns and a field goal while the worse team scores just three touchdowns. But I think that's probably decently representative of scenarios where the rule would have an impact. (Obviously it wouldn't matter if the better team scores six touchdowns and the worse team scores only one.)