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On the tax burden: Strategy expects the Oct 31 payment to be a non-taxable return of capital, up to your cost basis (8-K, Oct 1). Return of capital isn't income when you receive it. Each payment lowers your basis by the same amount (IRC 301(c)(2)). Once basis hits zero, further payments are capital gain. The tax shows up when you sell, as a bigger gain on a smaller basis.
Daily or twice a month, the year's total is the same: $12 a share at 12% on $100 par. It shows up as one number, box 3 (nondividend distributions) on the 1099-DIV, and brokers adjust basis on covered lots. Strategy files a Form 8937 for each payment; the July 15 one cites 301(c)(2). The final character depends on full-year earnings and profits, so it's settled after year-end.
On the swings: $0.50 is 0.5% of par twice a month. Daily at 12% is about 0.03% a day.
Not tax advice.
I'm not a fan of daily dividends. It's more tax reporting burden if trying to calculate cost basis for a future sale, and it doesn't match the biweekly income that people are used to considering. That said, there's no question that it will dampen volatility when there are no longer built-in 0.50% price swings due to large dividend payments. The decreased volatility should improve perception of stability as well, which may attract additional capital. So for those reasons, I think they should proceed with daily dividends, and Strive has already proven how beneficial the daily cadence can be for these products.
I think the establishment of the siloed cash reserve for preferred share obligations and the rebound in bitcoin price have already done a lot to recover the price of STRC. I suspect it will reach par again by November regardless of the vote.