This is mentioned in the article, it isn't a contradiction. You need both periodic phenomena and the generation of entropy for a clock to work.
Consider what would happen if we used the earth's rotation as a clock, but without generating entropy. We would have a system which would go back to its original state every day, each rotation. This means there would be no way to discern how many days have passed, as the system would be in the same configuration as it was at the beginning of the rotation.
In order to encode how many days have passed, you need to increase the system's information, and by doing so you increase its entropy. The same problem applies to a pendulum clock: you can't have a pendulum clock as anything but an entropy-generating device, or else it will keep going back to its initial state without any changes, not measuring any passage of time at all.
In the pendulum clock, the mainspring provides the entropy flow that allows it to time-keep and register the passing of time on the indicator. In the sundial, the flow of light from the sun into the sundial and into our eyes provides the flow. The light flow gets interrupted by the gnomon, casting a shadow (an irreversible process). In order to register that this has happened, you look at the sundial and take note of the time (another irreversible process). You can replace yourself with light-sensitive paper, which gets etched by the light (yet again another irreversible process).
The other sources of entropy (like tidal friction, as well as atmospheric friction and friction between the layers inside the Earth) are irrelevant for the sundial's working, but could possibly be used to create timekeeping devices themselves.
I'd say the main difference between the Sundial and the Pendulum clock's working is that in the pendulum clock, the energy to keep the pendulum oscillating and to register the passage of time are both provided by the same source (the mainspring), while for the Sundial there are two different sources of energy: sunlight provides the energy to register the passage of time, while the Earth's inertia is the only source of energy that keeps it rotating.
We could make the two systems more similar by changing the pendulum clock so it's only a pendulum, creating a separate indicator consisting of a light shining onto a pendulum and a sheet of photosensitive paper slowly moving down and receiving the pendulum's shadow, registering the passage of time onto the paper without using the pendulum's energy for that.