Yes, I agree he is fast and loose with his terminology. But I have SEEN this (seen switches start acting as hubs when the MAC address table fills up)with my own eyes. Also, a large part of the functionality of DSNIFF is based on this phenomenon.
Yes, it DOES require extra logic. I think the philosphy behind this design is likely something along the lines of "it is better to lose the swicth functionality and have uneccessary traffic go to ports where it is not needed than drop any packets" - and of course this design will wreak absolute havoc in a spanning tree environment - you'd basically have it all start looping...