SSF-upon low gear, do you lower PlayersX?

The best gear farming strategy has never been "maximize mobs/time" but has always been "maximize drops/time" (in the right zone(s)).

Lower player count = squishier mobs = potentially faster kills = potentially more mobs/time ("potentially" because some builds just don't care and don't notice a difference). This comes at the cost of less drops/mob and hence inherently lower drops/time given the same number of mobs.

Higher player count = the inverse of the above: potentially less mobs/time but more drops/mob.

Maximizing drops/time is a relatively simple evaluation of mobs/time x drops/mob to figure out the actual drops/time.

For some builds/players drops/time will be higher on lower player counts. For some, it'll be higher on max player counts. And for some it'll be higher at say 3 or 5 players.
Which is true for you..no one knows until you actually tested it. It all boils down to your personal clear speed on different player counts and hence cannot be generalized into a universal rule.

Zone and target mobs do also play into this as some don't actually scale with player count in terms of how much stuff they drop.

Correct, you have to balance things.

Simplified, as player count goes up, nodrop goes down. That inherently means that for those mobs affected by nodrop (which is most but not all), the odds of receiving more drops go up as the odds of not getting anything (nodrop) go down. As a result, you ultimately get an average x% more drops/kill on a higher player count where x depends on the exact player count, the zones you farm, the mobs you kill and so on and so forth (figuring that one out correctly is the actual complex part).

At the same time, because mobs get tougher at higher player counts, you will take y% longer to clear the same farming route where y depends pretty much entirely on your build, gear level and playstyle. That one is fairly easy to figure out by simply using a stopwatch for a few runs and comparing directly.

If for you, y > x, meaning the increase in time taken outweighs the extra drops/kill, then that higher player count isn't worth it and you should drop to a lower one.
If however for you x > y, meaning the extra drops outweigh the extra time because you still clear fast enough, then stick with the higher player count as it will net you more drops/time.

Comparing p1 to p8 is relatively simple here (after the complexity of getting x right) but it can get more complicated when throwing in other player counts as well, simply because kill time is typically not a floating scale but has cut-off points.

For example:
Say you're a

Nova sorc. You need on average 3 novas to kill on P1, 4 on P3 and P5 and 5 on P7 (arbitrary numbers, just going for the concept here).
Say also you get on average 20% more drops on P3, 34% on P5 and 42% on P7.
Looking at the novas needed, P3 takes 33% more time, as does P5. P7 would take 66% more time as compared to P1.
You would then suddenly find yourself in a situation where P3 is worse than P1 because it takes too long as compared to too low a drop increase.
The same holds true for P7.
You'd assume P1 is then the ideal.
And yet, in that scenario, P1 isn't actually the ideal but P5 is because thanks to the threshold-design of kill times, P5 drop increase actually outweighs the time increase.
The numbers here are completely arbitrary but these scenarios do exist so you can't just go "P1 > P3 so P1 is the best choice", you do have to compare all of them to really get your personal ideal.