Absolutely. My wife’s cousin married a Thai man in the same family home that my wife and I were married. The marriage ceremony was exactly the same including the Sin Sod.
Yes Sin Sod is a tradition in Thailand. Western culture also has traditions. Like western society today, how you approach this tradition varies all over the map. Some people do it, some not, and there are variations in between. Remember that you are in Thailand, not in your home country. There are no set rules but leaning toward the culture of the country you are living in might be a consideration.
My perspective is that you look at the big picture. If you do it then only do what you can afford. It’s no different than westerners deciding how big and expensive and elaborate their wedding ceremony will be.
Note that this is not just something they foist on westerners. Thai families practice this too. I witnessed this at my wife’s cousin’s wedding.
Sin Sod is actually a part of the traditional wedding ceremony. The specifics of the tradition vary around Thailand and by family circumstances and status. So whether it is real money given or money to be returned, there will likely be a part of the ceremony that focuses on Sin Sod. Not unlike throwing rice or flower bouquets or whatever is common in your country.
Big picture - consider the total cost of the wedding. There are going to be costs for decorations, food, photographers . . . and then there is the Sin Sod. How big a % is the Sin Sod really? Even with the Sin Sod the cost of my wedding was a fraction of what the wedding would have cost in the west. It was a forgettable line item in a much better and more beautiful wedding than my first marriage in the US.
You tried to talk to the US SS office or the one in Manila? I’ve been able to communicate with the Manila office by email. They have responded within a couple of days. Tell them you are living in Thailand.
The proof of life letter is not that harsh. I moved from Bangkok to Sisaket province. Last year when I got the letter it said that it was my second notice. I sent it back by EMS and there was no interruption of my benefits.