The "corruption" allegation is that for, yes, SpaceX, index funds will effectively be "forced" to buy in right away at their IPO price, rather than seeing where they settle before getting the money in. Given that most people have most of their money in index funds, it's sort-of an automatic buy and raises some hackles about a fixed game.

Saying "you can trade the basket yourself minus the names you don't like" is not a real counterargument. Most of us are not going to do that, I'm not going to do that and I'm writing this post right now. John Doe is certainly not doing that.