Right. older translators don't like that. Write it as below if you intend such older translators to be able to swallow it.

It doesn't say "POD files can't do this." It says "Many older Pod translators...". Meaning that others don't. "will make such Pod translators...fail". Not "will never work", but will make (only) those old nasty ones fail. That is, it's not backward compatible.

I don't see it meaning anything else. It's not like one of those cube pictures where it snaps into something different once you realize what was meant... it's saying that this example is not backward compatible, NOT that it's illegal.

Arguing is pointless. Clearly it is either wrong or at least capable of being misinterpreted by someone who read it carefully.