The planet explanation makes no sense as the Avatar's purpose and duty is tied to humanity- not to the planet. This is Yangchen's quote:
The avatar exists to stop humans from being shitty to each other and make sure they all live in harmony- same as the dalai lama.
The avatar's purpose is to bring balance between the nations, which as far as we know is literally the entire planet (that's one wierd thing about avatar, it depicts 4 continents, but they are on a flat map instead of a globe...but they never indicate traveling outside the 4 nations). The planet is not an indifferent rock, it is a spirit that cares about it's inhabitants. The show itself rejects the distinction you make. All is one. The humanity is part of the planet, as much as forests or other animals. Why would it care about one, but not the other? However, it just doesn't understand them, because, as Yang Chen said, being giant all powerful spirit doesn't leave much common ground with the ordinary folk. That's what I think Yang Chen's spirit is saying. She is literally saying he needs to be flawed, to be human, to know the value of humanity. She defines being a truly enlightened spirit as having detachment from life, which would risk him devaluing it too much, something that the avatar must not do if they are going to maintain peace. There is a specific part of Yang Chen's quote you missed, and that is (and I'm paraphrasing here) "Many great air nomads have achieved enlightenment, but the avatar must never do this." This is a significant contradiction to your quote. The Dalai lama, according to the myth you stated earlier, is supposed to have achieved enlightenment (giving him the authority to be a teacher) but rejected ascension. The avatar is supposed to reject enlightenment altogether, and his teaching is meant to be flawed so that he might relate it to people better. You might argue enlightenment is ascension, but that if that's true, then Yang Chen's quote would make no sense, since if the avatar did achieve enlightenment, it wouldn't be on top of any mountain, it'd be gone.
Anyway, I don't really understand what your objection is. Remember that the origin of this debate is trying to determine what the avatar
is, not where the idea is from. I used the quote to point out that was the original plan and it still makes sense within the context of TLA, and now you're on this dalai lama stuff. But that's their
inspiration, not their depiction. I'm not saying that the avatar can't be or isn't
like the dalai lama, but even if that's what they're inspired by, are you saying the avatar
is the dalai lama? It doesn't seem so, but feel free to correct me. It seems your just saying that the avatar has similar duties to the dalai lama. Which I can agree is a valid interpretation. But what TLA defines the avatar duties as specifically is "Bring balance to the world". You can define that as helping people live harmoniously, or you can define it as just them not fucking up the planet. Both work, so I can use whichever one I want. If they wanted to make "helping people live harmoniously" the sole possible interpretation, they should have specified that. But they didn't, so you can't force this dalai lama explanation on me like that. If that's your goal, first you have to find something within the show that contradicts the planet so hard that it is essentially unworkable without ignoring significant pieces of the story.
But really, it seems we're arguing over petty details here, because they are doing the same thing in the context in the context of TLA. If we include LoK's specific depiction of what the Avatar Spirit is, we run into some continuity errors, but as far as TLA goes, either of our interpretations work. Who cares if we differ in this insignificant detail, since the story isn't about whether the avatar is the planet or dalai lama, it's about whether Aang can fulfill his duties as the avatar.
Edit: Honestly, if I were to go forward with my plan to reinterpret Legend of Korra in hopes of doing it justice, I'd probably have Korra, Asami and Kuvira as the most predominant characters. Not for shipping purposes, I just feel they'd have a great group dynamic, more so than Mako and Bolin being in the group. I'd feel I'd have to change their personalities more drastically than I would Korra or Kuvira to make them work.