I have no idea if this is going on or not, but it is possible to send merit from a --> b --> c --> d --> a
I believe this is what the post you quoted is referring to, or something very similar to the above.
4 degrees of separation will connect a huge number of false positives if we're going to accept that kind of merit transaction.
You could say this about almost any member that's sent and received a substantial amount of merit (i.e. users on the list)