On the contrary, people’s mental states aren’t identical, because they’re mediated by the background memories, personalities, and dispositions that define our individual identities and are stored differently in each person’s brain. If the form of human consciousness is the same for everyone and is eerily featureless or seemingly “ghostly” (immaterial and witnessed by a hidden observer), that could be due to the brain’s production of the same magic trick or illusion of a Cartesian spirit in each brainpan.
After all, we not only all feel like an immaterial spirit, but we each have a human brain ensconced in our skull, behind the blood-brain barrier, being fed information from the senses. So either there’s a single, divine observer of all recorded human experiences, or the same natural trick of emergence is being performed in billions of human heads.
Indeed, science-centered modernity invalidated certain interpretations of reality, but it also cast doubt on religious methods of acquiring knowledge. Mystics appeal to direct experience from practices of mindfulness and meditation, but the theological interpretation of what it’s like to be in those peak states of awareness is more like art than science. The theology is often arbitrary and in some cases outdated.
For example, if the principle of karma were just about causality, it might be consistent with the scientific worldview. But karma is supposed to preserve moral values across time, as the consequences of actions build up. If moral values aren’t objective, there can be no such physical accumulation of goodness or badness. In that respect, the karmic principle is pseudoscientific and is comparable to the so-called law of attraction, which says the universe gives us what we want, in that good or bad desires “attract” the corresponding outcomes. That reference to “attraction” is likewise pseudoscientific.
What scientists showed is that causality is amoral. In the West, this manifested in the abandonment of Aristotelian final causes or ultimate purposes in the explanation of natural developments. Scientists explain how one thing follows another and don’t posit any inherent moral value in those events. We’re free to assign such values, but that’s not what the principle of karma implies. Karma is like a final cause in that it takes the moral value to be objective and inherent in the relation between cause and effect.
The monist who says there’s really only one observer, namely God who perceives the world through us, can say that compassion is as rational as egoism. If we think it’s wrong to hurt ourselves and we come to think we’re fundamentally identical to everyone else, we should refrain from harming others since we’d only thereby be harming ourselves. I think that’s the argument you’re assuming.
But this assumes the rationality of selfishness, and that’s not self-evident. What if we deserve to suffer? In that case, maybe we should punish ourselves. If the only real observer is divine and can’t be harmed, what would be wrong with harming God’s illusory avatars? (Compare this to the scene in Spielberg’s movie AI, in which some people advocate for the harming of artificially-intelligent robots, to protest their phoniness.)
Or what if enlightenment has rendered us insane and beyond the distinction between good and evil, when we realize we’re identical to God who is the only reality and who in turn has been driven insane by loneliness, which has compelled him to create universes and avatars in which to hide so that he can forget his horrific nature and responsibilities.
In short, an enlightened person in this mystical tradition still faces the existential choice of how to respond to the knowledge or the feeling that only God is real and that all humans are fundamentally one. If anything, popular culture depicts sages as wishy-washy and mercurial, on the suspicion that sages haven’t figured out what to make of the absurdity of our existential situation, given monistic spirituality.