I can't see how there is any possible explanation of the agreed upon facts that doesn't paint Kyle as making a horrible mistake with respect to ownership rights

I can't see how there is any possible explanation of the agreed upon facts that doesn't paint Kyle as making a horrible mistake with respect to ownership rights. He submitted a YC application that listed them as co-founders, and has no paperwork showing the Jeremy gave up his share (whatever it might have been). So, the only explanation I can come up with is that " An experienced & successful entrepreneur" took on "an unknown cofounder" without proper paperwork. That's a pretty surprising set of circumstances, but it seems pretty clear that it happened.