My question would be, who would it be terrifying for? The idea could be terrifying for you but those realities themselves could only be terrifying to you if you experienced them, and as humans I don't know if we can experience them all at once. Just one at a time it seems. And some people do experience terrifying realities, and some don't. The totality of existence, whether it's called God or the source or whatever, probably experiences consciousness in a radically different way than human beings do. And why not? We're just a small piece of the puzzle.
It is terrifying to me because the suffering of other beings matters to me immensely. And to me the many-worlds hypothesis doesn't seem to suggest a zero-sum world, so much as a staggeringly negative one.
Consider when you are driving a car, for instance, down a city street. Most of the possible actions you have available to you to take will produce a very negative outcome. You could swerve off right, could swerve off left, could ride your car on the sidewalk, etc. Only a very narrow set of choices will see you producing what really amounts to a modestly neutral goal- getting your vehicle from A to B without catastrophe. There are far more ways you could have caused disasters on that trip. When you drive a car, I don't think the sum of possibilities is zero, but starkly negative. There isn't really a set of fantastic positive wonder events that may also happen that outweigh the 95% plus of possible outcomes that are terrible.
The car example also isn't unique. What saves our world from being so terrible is that negative choices are given weight in our minds, such that we are much less likely to choose them. But if every possibility plays out somewhere, the probability safety is no longer there.
In our lives we are threading a needle. We are hand-selecting what we perceive to be the best possible outcomes for ourselves, and hopefully others. I don't think humans know completely what is best, but I think we likely choose well more than poorly, at least on the individual level.