You should check out Greg Maxwell's talk on Youtube about confidential transactions.

I don't believe that would create any such value overflow problems. As a softfork this is allow transactions to be confidential, but you could still use old software with the non-confidential transactions and confidential ones would still be valid, this is done by miners agreeing that even tho according to the old protocol anyone can spend coins locked in this way, they will not accept transaction that don't offer extra proof. The bitcoins locked in these confidential transaction chains would be limited by old nodes as well that wouldn't be able to account for the extra coins, as for them they still see the same coins existing, just locked in a way that anyone can spend them.

The vulnerability you mentioned is very very old (2010) and really has nothing to do with this concept, so it is unlikely that the problem will be possible in any way if confidential transactions are implemented.