Half of that document isn't even in comprehensible English.

If you notice, it also says that cold storage got wiped out due to a leak in the hot wallet.  That can't be explained by transaction malleability alone. Something had to be very, very wrong with MtGox's accounting procedures for them not to realise that they had paid out more than they should have over such a long period of time.  

In fact the document explicitly says that "regardless of malleability and regulatory issues, MtGox's main problems are massive robbery and poor bitcoin accounting".

The short-fall should have shown up when they reconciled their accounts because the funds left their wallets twice even though it only showed up once in their accounts.  The discrepancy would have shown up when the hot wallet balance was lower than what it should have been according to "the books" - just the same as if the bank double processed every bill payment you made, you'd notice when you checked your bank balance because it would be lower than it should be.

A business that size should be reconciling their accounts at least daily.  There should have been procedures in place to ensure that the amount of funds shown as going out of the hot-wallet was the same as the amount which actually left the hot-wallet and it shouldn't have been possible to refill the hot wallet unless those two amounts reconciled.  If they weren't reconciling the hot wallet balance against the books then they had no mechanism in place to protect against embezzlement, either.

The malleability issue may have uncovered something deeper, but it's definitely not the whole story.  Just their book-keeping procedures should have revealed this.  If it's a long-standing problem, then a short-fall should have shown up when their financial statements were prepared last year (remember the Japanese financial year ends 31 March).