Your question why Lord Siva was ordered to appear as Sankaracarya and teach the Mayavada philosophy to turn the people to atheism and thus increase the population, that nobody can understand. If Krsna desired Lord Siva to do like that, so he had some plan which we need not understand. He is the Supreme Lord, and He is maintaining the huge universal affairs, so how does He do things and for what purpose He does them, it is very difficult to understand. Just like He planned the battle of Kuruksetra and He induced His friend, a great devotee, Arjuna, to kill. So why does He plan to make others atheist, it is known to him. Our business is to glorify Him always, either He plans to dance with the Gopis, or He makes a plan to kill others on the battlefield of Kuruksetra, or He plans to do something which is not very good from materialistic point of view. Our only business is to remain steadfast devotee to Krsna in all conditions.
Letter to Ekayani, 3 May, 1970