An analogy that points at one way I think the instrumental/terminal goal distinction is confused:

Imagine trying to classify genes as either instrumentally or terminally valuable from the perspective of evolution. Instrumental genes encode traits that help an organism reproduce. Terminal genes, by contrast, are the "payload" which is being passed down the generations for their own sake.

This model might seem silly, but it actually makes a bunch of useful predictions. Pick some set of genes which are so crucial for survival that they're seldom if ever modified (e.g. the genes for chlorophyll in plants, or genes for ATP production in animals). Treating those genes as "terminal" lets you "predict" that other genes will gradually evolve in whichever ways help most to pass those terminal genes on, which is what we in fact see.

But of course there's no such thing as "terminal genes". What's actually going on is that some genes evolved first, meaning that a bunch of downstream genes ended up selected for compatibility with them. In principle evolution would be fine with the terminal genes being replaced, it's just that it's computationally difficult to find a way to do so without breaking downstream dependencies.

I think this is a good analogy for how human values work. We start off with some early values, and then develop instrumental strategies for achieving them. Those instrumental strategies become crystallized and then give rise to other instrumental strategies for achieving them, and so on. Understood this way, we can describe an organism's goals/strategies purely in terms of which goals "have power over" which other goals, which goals are most easily replaced, etc, without needing to appeal to some kind of essential "terminalism" that some goals have and others don't. (Indeed, the main reason you'd need that concept is to describe someone who has modified their goals towards having a sharper instrumental/terminal distinction—i.e. it's a self-fulfilling prophecy.)

That's the descriptive view. But "from the inside" we still want to know which goals we should pursue, and how to resolve disagreements between our goals. How to figure that out without labeling some goals as terminal and others as instrumental? I don't yet have a formal answer, but my current informal answer is that there's a lot of room for positive-sum trade between goals, and so you should set up a system which maximizes the ability of those goals to cooperate with each other, especially by developing new "compromise" goals that capture the most important parts of each.

This leads to a pretty different view of the world from the Bostromian one. It often feels like the Bostrom paradigm implicitly divides the future into two phases. There's the instrumental phase, during which your decisions are dominated by trying to improve your long-term ability to achieve your goals. And there's the terminal phase, during which you "cash out" your resources into whatever you value. This isn't a *necessary* implication of the instrumental/terminal distinction, but I expect it's an emergent consequence in a range of environments of taking the instrumental/terminal distinction seriously. E.g. in our universe it sure seems like any scale-sensitive value system should optimize purely for number of galaxies owned for a long time before trying to turn those galaxies into paperclips/hedonium/etc.

From the alternative perspective I've outlined above, though, the process of instrumentally growing and gaining resources is also simultaneously the process of constructing values. In other words, we start off with underspecified values as children, but then over time choose to develop them in ways which are instrumentally useful. This process leads to the emergence of new, rich, nuanced goals which satisfy our original goals while also going far beyond them, just as the development of complex multicellular organisms helps to propagate the original bacterial genes for chlorophyll or ATP—not by "maximizing" for those "terminal" genes, but by building larger creatures much more strange and wonderful.