During the encryption phase the argument by Strilanc doesn't hold (as in that case decrypted[i] is given as the input and does not contain any key admixture), a

During the encryption phase the argument by Strilanc doesn't hold (as in that case decrypted[i] is given as the input and does not contain any key admixture), and it is exactly the case where pos_c equals pos_a that is problematic, as in that case the statement key[pos_a] ^= key[pos_c] ^ i ^ decrypted[i]; overwites key[pos_a] with the value i ^ plaintext[i] that doesn't depend on any part of the key at all.