Obviously, we don't have the same definition of 'the market'. And btw, without Market makers, there would be no option market as we know it.
Key here "as we know it". Absolutely agree. But we would have a market. Potentially, and most likely, a more efficient one. There is always a market when there is supply and demand.
Even with more decimals if I indeed wanted to buy 100 I would adjust my limit price according to the price at or below which sellers offer the aggregate of my bid volume. Fully agree with all your other points, made. Tighter spreads are good for the public, bad for MMs. And a single exchange and market place for all would be on the top of the wish list.
It's a real problem when an option is quoted 0.05 / 0.10 and the only way to get filled is crossing the spread.
The forex trading market is overcrowded with traders, and new brokers are evolving every day. In such a saturating condition, showing options with more than two decimals shall make the bidding process more cumbersome. Further, a more precise fraction will lower the chances for a trader to bid and sell.