That higher order simulation would be different than humanity’s concept of a simulation, one might call it creation. I think what this proof says is no matter how powerful and knowledgeable we become we are not able to re-create ourselves.
This mirrors wisdom given to us thousands of years ago in the Old Testament.
But putting aside revelation, and just going on Natural proofs, we have no idea how many intermediate steps there might be between us and God. And something that might be closer to be described as a simulation than to anything else that lends itself metaphorically might be the first step.