He will have paid 1 million actual dollars for it since he escrowed the usdc today. If he didn't have to escrow now, then yes he could have upside from usdc collapse.
Discussion
usdc - is not exact dollar although current exchange peg recovered to present usd - check terra luna , waves-usd depeg case
I understand that usdc can become worthless. Today, he paid an actual million dollars for usdc that will be used to pay out the bet (or at least, he could have converted it to an actual milly instead of putting it in escrow). His cost already was an actual $1M ... what the winner receives at the end may be worth less at that time, but his cost basis is set in stone.
if he could/can convert his usdc now - yes u r right if no other constraint 1usdc=1usd for now - unless guessing usdc from ransomeware lol