Bob claims he never received fiat funds?
I'm not worried about the reverse case as there no question about bitcoins going through.
The graphic should show what happens if Bob does not receive the wire transfer and they agree to cancel the transaction. I guess in that case a "rollback transaction" is necessary (input: deposit 1.2, output: Bob 1.1 , Alice 0.1) right?
I wanted to keep the graphic simple and probably there are already too much details in. It is more to get a quick overview and a help for less tech-savvy people. In the paper most of the scenarios are described.
At the end it comes to the point that they need to ccoperate, otherwise both will loose. So if there are a problem like the bank tx failed, then they can communicate and find a solution based on cooperation. They could create a rollback tx if they agree, both have the keys needed for that. But as this would be an unexpected case I did not include that (in the software there should be tool for that).