A comparative clause without a subject

Why is this comparative clause correct?

The situation might be worse than seems to be.

Does it omit the subject " that" or " it"?

The comparative clause is unacceptable in its current form.

Given that it is fairly simple and its meaning useful, it should be easy to find examples of, were it grammatical. However it's extremely rare, producing only one hit across a number of corpora (iWEB, COCA, COHA, HANSARD, SCOTUS):

This ought to be understood more clearly than seems to be. (Comissioner Curran as quoted by the NYT 1926)

It does not seem to be the omission of the subject that causes this construction to be unacceptable as the same construction with something further after be produces plenty of hits.

The pacing is sure and sharp throughout and the writing leaner than seems to be the fashion these days (The Artifacts of The Case; Paul Skenazy; Washington Post, 1993)

These economies are providing their citizens with better tools to succeed than seems to be the case in the United States today. (A taxing problem; Alessi, Scott; U.S. Catholic, 2012)

What is more, countries such as Zimbabwe are heavily involved in the South African situation and have a greater sense of realism about it than seems to be apparent here. (Mr Cuthbert Alport, House of Lords, 1989)

The three examples above, and more like them seem grammatical and accord with guidance from CaGEL p1113 on the omission of a subject from a comparative clause:

In clauses where the verb is retained, the subject can be omitted only when it is the counterpart to the comparative phrase or is understood as an embedded clause, as in (d) above:

i More people came than were invited. [counterpart to comparative phrase]

ii He spent longer on it than seemed necessary. [embedded clause]

iii *Liz works harder than __ worked/did last year.

To remedy [iii] we must either insert a subject (she) or else omit the verb too, giving than last year.

The given example has an omitted subject that can be understood as an embedded clause or simple the situation like (iii) above:

The situation might be worse than (it) seems to be (that the situation is)

The situation might be worse than (the situation) seems to be.

If interpreted in the second way above, omission of the subject is not allowed. This also seems to be the default interpretation with this construction.

It becomes much more acceptable if there is a complement after be:

The situation might be worse than seems to be the case.

The reason it becomes more acceptable this way is that the omitted subject may no longer be understood as the situation.

*The situation might be worse than the situation seems to be the case.

(1) ??The situation might be worse than seems to be.

I can't think of any context where (1) could work for me. Please state your source and/or at the very least why you think it's "correct".

The easiest fix I can think of is to add it:

(2) The situation might be worse than it seems to be.

Note it here refers back to the situation, and that it's not dummy it. When it refers to the situation as in (2), it does not contain anything being compared, so it cannot be omitted.

There are two kinds of dummy it:

(a) It seems that the situation is bad. [It has no meaning.]

(b) It seems to be the case that the situation is bad. [It refers to an extraposed subject that the situation is bad.]

If we're to use dummy it, we can say:

(3) The situation might be worse than it seems that the situation is. [using (a)]

(4) The situation might be worse than it seems to be the case that the situation is. [using (b)]

In (4), we should be able to omit dummy it if we also omit that the situation is, because the that-clause contains what's being compared.

(4') The situation might be worse than seems to be the case.

Since the dummy it in (a) doesn't specifically refer to the that-clause that contains what's being compared, it's questionable at best if we can omit the dummy it along with the that-clause in (3) as follows:

(3') ?The situation might be worse than seems.

Adding some phrases like at first glance, at first sight, etc., however, might slightly increase its acceptability:

(3'') ?The situation might be worse than seems at first glance.

Strangely, changing the verb to 'appear' appears to fix the problem:

(3''') The situation might be worse than appears at first glance.