Advising founders to recruit unpaid volunteers is horrible advice. Not only do you tend to get what you pay for, "free" labor can prove to be anything but free once the lawyers get involved.
I read that point to specify that you don't have to pay them in money, rather there are other currencies that are out there that can be far greater than money; like stock options, connections, real life code examples, etc.
All of the points you mention about the pitfalls of "unpaid" persons can be seen with paid employees as well. It just seemed like he was saying that there are alternative currencies out there other than just money.
Oh and anyone working full time on sweat equity should be a founder and if you're not calling them a founder you shouldn't have them on your team at this point.