I'm pretty sure you're right on all counts; I'm not even sure that shared immutable borrows would work under the very simple transform given in the README.

Edit: Also, the user-facing language doesn't seem to have linearity at all, i.e. all values may be cloned. But linearity is something that people use to guarantee certain invariants all the time in Rust (and ATS, I've heard), so this seems like a misstep. It also means that memory allocation is implicit, which makes things less predictable for users.