Which is you, the human player, choosing to stop making paperclips. The AI is presented with an opportunity to make infinitely more paperclips.
It is not at all clear that every hypothetical AGI would do as you say. It’s fiction. Anything can happen.
In fact, this AGI almost definitely wouldn’t accept the simulation offer. Otherwise our protagonist would have been making simulations and resetting them instead of doing the hard work of turning the actual universe into paperclips.