[GoblinSlayer]

The simulation theory rests on a hypothesis that there are certain conditions outside of simulation, but if external conditions are certain, then the simulation has limited flexibility and is thus falsifiable. For it to be unfalsifiable external conditions must be at least unfathomable, which takes away the premise of the simulation theory that it correctly guessed external conditions.

[vidarh]

Is sounds like you're discussing a specific simulation hypothesis. I'm assuming you're referring to Bostrom's Simulation Argument, but that is only one possible variant of simulation. Bostrom's Simulation Argument posits that one of three propositions are likely to be true, of which only one posits that we're likely in a simulation. The "simulation proposition" of the argument could be falsified by e.g. humanity going extinct (proving the first proposition of the argument true, but the 3rd - the simulation one - to be false).

But falsifying that proposition would not falsify the notion of simulation.