Back to the sync issue. I understand something like the g7x, with 1/5000 second capturing the strobe, will have 20 times more light from the strobes relarive to ambient than a 1/250 second sync time. So I can buy cheaper strobes, turn them down, or do creative things.
Not quite. Strobes are fast, but not instantaneous. Their power is modulated by flash duration, i.e. the xenon bulb can't vary its brightness, but it can vary how long it stays burning for. A full-power flash on a Z-330 is approximately 3 milliseconds in duration (~1/320s). It's also not uniform over time - profiling with a light sensor and an oscilloscope shows the strobe rapidly (~0.2ms) going from nothing to maximum brightness, staying there while the capacitors keep dumping energy into it, then gradually (~1-1.5ms) fading back down to nothing. If you turn the power down, then the 'maximum brightness' period gets cut short, and thus the overall exposure is not as bright. At very low power levels, it cuts out and starts dimming before it even achieves the maximum brightness level.
What this means with regards to cameras with very fast flash sync capability (i.e. compacts) is that while you
can sync very fast, going above 1/320-1/500 will start cutting into your strobe exposure if you use maximum power. If you use less than maximum power, then you can push the speeds higher without losing strobe light.
For my part, I generally sync at 1/160 (maximum afforded by my camera without HSS) for macro, and usually slower than that for wide-angle, although exact settings depend on lighting conditions. Since I'm using a moderately large sensor with a dome, I have to stop down quite a bit for sharpness (f/11 or more) and thus I'm using shutter speeds as slow as 1/50 and even pushing ISO up a bit in order to get nice, bright, blue background water.
I do understand that I will stop down for most underwater shots for depth of field and using strobes I won't need low light performance, which effectively negates most of the benefits of a larger sensor.
A larger sensor, all else being equal, will resolve more detail. Look up the concept of the Airy disc - the pixels on modern digital cameras are generally smaller than that, so while you
can cram more pixels into a given sensor size, physics won't let you focus the light coming off a certain point of your subject onto an area smaller than the Airy disc limit for the given wavelength. However, if you make the sensor larger, it will accommodate more of those Airy disks, and even with the same amount of pixels, you will be better able to see finer features of the subject. It's worth pointing out though, that with depth of field limitations of these larger sensors, you will find yourself using smaller and smaller apertures to get more DoF, and at some point, you will start losing that extra detail to diffraction.
But I don't understand why deciding between a small weather sealed full frame I will use outside of diving vs a 43 in the same price range, I should favor the latter.
The full frame camera will usually use much larger and more expensive ports, particularly domes. M43 and APS-C rectilinear wide-angles are usually shot with 170-180mm domes, which are reasonably compact, but full-frame cameras typically use 230mm domes, and these are
enormous - the numbers really don't convey how huge they are. Wet lenses can be used to sidestep that issue, but the wet wide lenses currently on the market generally target compact cameras, and most full-frame cameras lack lenses capable of working in conjunction with a wet wide lens. One notable exception is the Sony A7 series - the Sony 28mm prime and Nauticam WWL-1 can work together, and the 28-60mm kit zoom (recently released as a companion to A7C) is also said to work perfectly with the WWL-1, giving better results than 16-35mm lens in a huge dome.
An additional factor is that many people are unwilling to risk their expensive camera (an A7R IV is $3k for body alone) and potentially equally expensive lenses by taking them underwater. Even the highest quality and most expensive housings can leak or flood, and in some emergencies, you may lose your system altogether. Losing a $500-1000 system is far less painful than a $5000-10000 one. While it's possible to build a full-frame system for the same or lower price than an M43 one, you really have to work at it - for instance, compare a used A7 III body in a SeaFrogs housing to a brand new E-M1X in Nauticam.