The Architect's conversation with <PERSON> is at times difficult to follow, but the Architect is fairly clear about his threat to the human race:
The Architect: You are here because Zion is about to be destroyed - its every living inhabitant terminated, its entire existence eradicated.
<PERSON>: Bull--.
The Architect: Denial is the most predictable of all human responses, but rest assured, this will be the sixth time we have destroyed it, and we have become exceedingly efficient at it. The function of the One is now to return to the Source, allowing a temporary dissemination of the code you carry, reinserting the prime program. After which, you will be required to select from the Matrix 23 individuals - 16 female, 7 male - to rebuild Zion. Failure to comply with this process will result in a cataclysmic system crash, killing everyone connected to the Matrix, which, coupled with the extermination of Zion, will ultimately result in the extinction of the entire human race.
transcript of The Matrix Reloaded
The difference between this threat and the failed Paradise Matrix is that the Machines weren't about to destroy Zion (i.e. kill all the humans outside of the Matrix) when the Paradise Matrix failed. With the Paradise Matrix, any humans not in the Matrix (we don't know if there were any) would have survived. Furthermore, Agent <PERSON>'s quote does not suggest that every human in the Paradise Matrix died. 973
If Agent <PERSON> meant to say that every human died, he would have more likely said that "every crop was lost" or "all the crops were lost". Since humanity did not go extinct with the failure of the Paradise Matrix it must be the case that some humans survived, either inside or outside of the Paradise Matrix when it crashed.
The important thing about the Architect's threat is that the Architect is blackmailing <PERSON> with the extinction of humanity so that <PERSON> would choose to return to the Source and restart the cycle. He might be exaggerating when he says that a system crash of the Matrix would kill everyone. Even <PERSON> initially doubted that the Architect's threat was true:
<PERSON>: You won't let it happen. You can't. You need human beings to survive.
The Architect: There are levels of survival we are prepared to accept. However, the relevant issue is whether or not you are ready to accept the responsibility of the death of every human being on this world.
transcript of The Matrix Reloaded
Since the Architect was blackmailing <PERSON>, he might not have actually believed that all the humans in the Matrix would die (although the Machines might kill any survivors to make good on their threat to cause the extinction of humanity). The Architect's threat just had to be convincing enough that <PERSON> would believe him, and the Architect thought that was the case since (a) it would be irrational to ignore the threat and take a chance on all of humanity, and (b) all the previous Ones had believed the threat and returned to the Source. 973