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)
I havent done any kind of research on this, so I dont know if there is any credence to the OPs claim.
There are actually only three degrees of separation in my example. You could perhaps filter out cases in which only small amounts of merit is received from a person via three degrees of separation.