Hi Alex,
That is a great example to demonstrate and discuss the properties of equipment, imaging goals and choice of camera settings. But your motivation was to actively limit DOF to get the smooth background whereas this discussion started on how to get supermacro while retaining enough DOF for the subject of interest. But it raises an interesting point.
You mention: "If I had shot this with less magnification the background would have been in focus (or more in focus) and therefore much more distracting in the final image."
Do you mean the background of supermacro is qualitatively different from a normal macro shot taken at the same shallow DOF? In other words, could you have achieved the same shallow depth of field and background quality without the SubSee by opening the aperture as needed? I am surprised if you couldn't get the same DOF that way, but perhaps there is a different quality to the background due to TC or diopter?
The camera you used also plays a role and since it is on the extreme-end of the scale concerning pixel size it is a nice contrast with the D7100 in the review (54Mpix in FF equivalent). As a result the D4's resolution becomes sensor-limited much earlier than the D7100. That means it relies more on image magnification to achieve high-resolution. One interesting result is that in "my definition" of supermacro you would be well into supermacro on a D4 to achieve what is "just" 1:1 macro on the D7100.
I'm also interested in your combination of 1.7x teleconverter plus diopter. My guess is that the discrepancy between targeted image resolution and sensor resolution is so great that a diopter strong enough to achieve the desired magnification would give unpractical short focus distances. Because there is excess optical resolution the TC effectively converts the D4 to the equivalent of a 1.7x crop sensor with a pixel density equivalent to a 20Mpixel APS-C sensor. In your review you mention "I took my Nikon 1.7x teleconverter with me to Bali (as I use it a lot on my D4 with the 105mm) and didn’t use it once on the D7100". Chances are that if you had tried, and it would be fun to do the experiment, you wouldn't have gotten the same improvement as on the D4 unless shooting really extreme shallow DOF shots, because more often the sensor is not limiting.
Having pondered on this some more I wonder if the focus on magnification is not driven by the desire to compose the shot in camera. To fill the frame with a small creature you have no choice but to boost magnification, even if DOF-limitations don't allow you to increase resolution. My attitude is not to bother and achieve the same effect by cropping the image later. But if you are in a photo competition (of if you consider it cheating) then that is not an option.
Bart