If a rower has a very strong upper body with "functional muscle," should he choose an oar that may take advantage of that?
Find a rower who has the oars you are interested in and go for a test row or two. I've had recommendations made before and after testing, found I heartily disagreed. Then again, I've had people tell me not to use equipment and ended up loving it.
Why, at the last Olympics, are most of the pictures with the smoothie type oar and not the Fat if the Fat are more efficient?
When were the oars released in relation to the Olympic training cycle? If it was very late, it may simply be coaches not wanting to mess with something that isn't broken. If it was earlier, then the teams likely tested them and decided not to use them (for whatever reasons they had, which may not apply to you or I). Do a search on the Rowingillustrated boards. This topic has come up over there and NT members have weighed in with their thoughts in the past (I no longer recall their answers).
Can an oar with the extreme loading profile of the Fat2 create overuse injury from the forces going from a relaxed finish to full power?
My understanding is that making a significant change in loading at any point without adequate muscular adaptation can cause an overuse injury. Test them, if you notice a significant difference consider lightening the load for a short time and gradually loading it back up over a couple weeks.