It’s not economically inefficient for a UBI to reduce recipient’s employment

I think you are getting very distracted by the money flows here. A generally-useful move in these sorts of problems is to forget about the money flows, and just look at the real goods/services/economic value produced and consumed.

If a UBI causes a bunch of people to stop working, what does that mean in terms of production and consumption of real value?

Well, obviously if someone stops working then there is less total goods and services produced. That's a loss of real economic value. The trade-off is that the (former) worker gains some leisure time. So, from a real value perspective, the main question is whether the leisure gained has more real economic value than the goods/services no longer being produced.

There will also be second-order redistributive effects, as the redistribution of income/wealth changes spending patterns, but the analysis there shouldn't be any different from redistribution more generally. (This would include e.g. your Netflix/city apartment examples.) The part which is specific to UBI is the trade-off between leisure and goods/services produced.

Another question is "what counts as work? - What are they doing instead of work?"

Suppose a group of people are all given UBI. They all quit their job stacking shelves.

They go on to do the following instead.

1. start writing a novel
2. look after their children (instead of using a nursery) 
3. look after their ageing parents (instead of a nursing home)
4. learn how to play the guitar
5. make their (publicly visible) garden a spectacular display of flowers.
6. take (unpaid) positions on the local community counsel and the school board of governors.
7. helping out at the local donkey sanctuary
8. getting themselves fit and healthy (exercise time +cooking healthy food time)

Their are a variety of tasks that are like this. Beneficial to society in some way, compared to sitting doing nothing. But not the prototypical concept of "work". 

I would expect a significant proportion of people on UBI to do something in this category. 

Do we say that UBI is discouraging work, and that these people are having positive effects by not working? Do we say that they are now doing unpaid work?

Of course, the answer to these questions doesn't change reality, only how we describe it. 

Is working good for the rest of society?

Suppose you do some work and earn $100. The question from the rest of society’s perspective is whether we got more benefit than the $100 we paid you.

We can get more than $100 if e.g. you spend your $100 on a Netflix subscription...

If you receive $100 for work, that means you have already provided at least $100 in value to society. That society might gain additional benefit from how you spend your money is merely coincidental.

But when I work I get paid, so that I (and the people I share my income with) get most of the benefits from my work.

I sort of got lost at this point. Isn't the point of work that I get more in money than I pay in effort, and others get more in value than they pay in money?

So the benefits are split between the workers and the buyers. If they're not, no one will buy and I'll be out of a job.

There's no symetric incentive for me to provide at least the value I'm getting to taxpayers when they give me money.

I might incidentally provide that value because humans are pro-social, but it doesn't feel like I can say "the amount of value I'll provide with my unincentivized effort is so close to the value I'll provide with my incentivized effort that it's dwarfed by externalities" just on intuiton.

You also have to balance out all the people will stop doing work that benefits society with the group of people that create something of huge value in the they used to spend doing wage labor.  Traditionally it was rich people who therefore have a lot of free time that made all sorts of advances in science and mathematics (see all the lords hanging around 18-19th century science).  The same logic goes for forming businesses unless a massive percentage of people don't work - it takes a ton of money to start a business because you still need to eat before you're profitable, and UBI takes some of the strain off that because, at worst, you still have your basic income to fall back on.  It doesn't take many people doing extremely high value work of this sort because they aren't doing wage labor to make up for any number of people who sit on the couch and watch television all day. 

Your argument proves too much - in medieval times, if more than 20% of people stopped working agriculture to buy food with their UBI, food prices would go up until they resumed, as an indicator of damage done to society from people stopping their work.

Capital costs in food production are significant. Land will still cost money, materials will still cost money, and machines will still cost money (though the cost of machines above and beyond the raw material cost could rapidly fall).

If I give you $8k, you will probably value marginal dollars less than you used to.

With an UBI you actually keep most of your marginal dollars that you earn at that point. In many systems where earning more means that you lose government support, earning a few marginal dollars isn't very helpful as the unemployed have a very high marginal tax rate when you account for them losing their benefits when taking a low paying job.

I expect a lot of people will find this argument to be confusing because they don't have an intuitive sense of what it means for something to be "economically efficient." To clarify what I believe to be your argument, I propose a thought experiment:

Suppose the American government discovered a portal to another universe that, when opened, spews forth an enormous amount of wealth (final consumer goods, not dollar bills) at some rate. After some tabulation, we find that the portal gives us so much free wealth that distributing its bounty equally among US citizens would provide everyone $1000 a month. In response, politicians pass a new law describing how the wealth ought to be distributed: we auction off goods that the portal gives us, and then distribute the revenue from the auctions equally, as to provide everyone a fair share of the pot (i.e. $1k a month to all).

Now, suppose someone claims that we should close this portal. Their argument: if everyone was given $1000 a month, then many would sit at home and do nothing. This portal decreases the incentive to work, and we therefore must not receive any of its benefits.

I'd imagine most people would not accept this argument for closing the portal. But indeed, this argument is precisely the one that people often give against UBI.

Have you considered the harm to physical and mental health associated with unemployment?

IMO the problem is that reducing incentives to work makes it hard to compute the actual cost of UBI. Naively, if we want to pay each person a UBI of X, all we need to do is multiply X by the size of the population. We can then infer how much it would cost to each given taxpayer. But, because of reduced incentives to work, there are additional effects s.t. reduction in tax revenue and increase in the price of labor (that propagates to other prices). The latter means we don't even know the value this X will have to the recipients.

I think the efficiency lens is probably the wrong lens to try to make sense out of UBI.  Economic efficiency is about margins, maximizing total surplus and allocation of resources. UBI is really about distribution of the available surplus.

True, connections here exist but they are not all that clear or straightforward, which is what you are asking for. Economics lacks a strong micro-macro theory linkage (no grand unification theory/ well functioning micro-based macroeconomic theories).

Last, as a question about distribution, I think the answer will actually change depending on a number of underlying factors related to both the society and the economy. I think it is clear that UBI (basically that just means that some stuff is free for people -- or at least some people) will be some function of both the total surplus in the system and probably some things like level of joint production (very high in modern large corporation and developed economies) as well as, lets call them, the elasticies of the external economies of scale in the economy. Probably some other factors as well.

I do agree that in general if everyone in the USA got 8,000 a year the impact on work would be trivial. In fact one might expect that such a marginal gift might actually promote some additional effort -- with the UBI and 2 two crappy jobs I might actually be able to afford a nice late model car. Without the UBI the two crappy jobs not only will not provide the means to buy a decent car, the additional wear and tear may leave me without a working car so the second job in not really a good return for me. (Pure hypothetical but could certainly see something like that happening)

However, that UBI would be about 13% or total GDP. That would, I believe have a direct impact on overall financial savings and investment that would need to be weighed against any non-financial investment (e.g. education) as well as any realistic savings in terms of all the existing social programs. Lots of reasons one might be a bit skeptical of that actually occurring. If we don't have a new gain socially from the UBI in terms of on-going investments then one might expect to see the pie starting to shrink over time and that would not be a good situation economically, socially, politically or culturally.

The marginal cost of producing something might fall to the price of the electricity + hardware depreciation, but the cost of delivering that product to a customer (marketing, sales, transporting, support, etc) will always be present. Also, too, if the thing has value, and can't be produced easily (eg high cost of entry to buy or build the automation) producers will be able to collect profits.

You need to pay for raw material, pay off investment in machinery and make enough to motivate yourself.

Even if my customers don’t pay me any cash, they still have value to me.

Are you sure ? Note that there is , for instance, no point in advertising in Gratistopia.

When automation comes, producers will compete against eachother for customers.

If every customer is worth zero, there would be no point.

The cost of production will essentially be 0,

It won't be exactly zero.

But in a fully automated situation, the production of food wouldn’t cost any labor at all, and therefore not cost any money at all either.

If the owners of the automata give the automata's products away for free, what's their motivation to invest in automata? You would need communism as well as full automation.

Overall I think that working is probably better for the world than leisure. The effect seems pretty small though (maybe 10% of the value you earn).

I think this intuition is different than many people have.  For hooligans (those of an untrusted or actually destructive/violent group), the effect could be 200% or more of the value they earn.  For most people, it doesn't matter, though - even if it's 10% or less, I don't value their leisure anywhere near as much as I value the small amount of utility they bring to the world by working.