Earlier quoted context omitted.
Just to hold you to task, here: what exactly constitutes "flourishing"? I'd bet you mean something other than mindless growth and expansion--just want to make sure.
What I mean to say is that if the need to produce material things vanishes, people don't replace that need by producing art and culture and placing increased emphasis on family, friends and community. By "flourishing," I don't refer to material production, but social prosperity. Having seen both, a ghetto in a U.S. inner city is objectively much more materially prosperous, partly thanks to government support, than a…
American ghettos are not places where unemployed people have all their needs provided for them and live in carefree leisure. Ghettos are places where society's traditional support structures have failed and, in order to stay afloat, a significant portion of the populace has turned to jobs so heinous and net-negative to society that they would be repellent in any other context. They're some of the first victims of the "bad jobs" that Stross warned in the OP that people would be forced to take in the face of poor employment prospects. Ghettos are a prime example of the harm that comes from our dependence on conditional money to live.
As a counterexample, retirement communities are generally much nicer than ghettos — even though gainful employment in those communities is even lower than in ghettos. This is because the people in retirement communities aren't desperate. They don't have infinite money, but they generally don't need to worry too much about money. So what do these people do when they are relieved of the need to work for a living? Oh, they work on personal projects and put an increased emphasis on family, friends and community.
I do think you're bringing up an important point. Most people haven't considered the social implications well enough, and there is a somewhat unsupported assumption that it would go smoothly. But I don't think ghettos are all the relevant, because financial independence is very much not the big problem there. And I also think you're glossing over the point that the employment crisis Stross mentions in the OP will cause major societal changes whether or not we institute a basic income — I just think the changes will look a lot more like a ghetto and less like a retirement community if we don't have something like a basic income in place.