After trying out the new update, I realised that this is actually written well. And uhhhh, I was wrong. Luddic religion is not tied to ethnicity and isn't about magic. The reason why people make better wares and possibly farm better probably has something to do with the fact that, you know... Phone bad. If we were to live in a world without tech that is degrading. Because let's be honest. Farming and Light Industry are industries that are probably actually fun to be in. Mining, Commerce, Refining, Heavy Industry might be interesting. But they are probably polluting and painful as heck to manage. The reasoning behind production being increased like that is the fact that... Well, maybe it's just general happiness? Having time to do what you enjoy? Not being bogged down by the evil of timetables? It's complicated and philosophical. And it was wrong for me to assume that it was tied somewhat to just "being religious makes you better". Especially considering the fact that this bonus is negated on planets that belong to the Luddic Church, but have industry.
Another aspect is the Luddic Church being somewhat peaceful, or benevolent, or whatever. This comes from the 1 stability bonus. Meh. Luddic Church are still mean as heck if they want to. After all they've made Luxury Goods illegal. Meanwhile Luddic Majority doesn't care if your city is a free port. They don't even care if you are using items. So, yeah...
The best thing about this mechanic is that it finally validates colonies that don't want to exploit their workers. I had that issue on my first playthrough. In that I wanted to have colonies that didn't treat people like garbage. And having a substantial boost for using only industries that are morally acceptable is gratifying. Thank you very much.