That scheme achieves the exact same outcome that bothers some people about infinite covenants, so we've been living with such a possibility since multisig (i think it was BIP34) was introduced, way back in 2011.
Not the
exact same. The difference is that coins in a 2-of-2 multi-sig can, with agreement from both parties, leave the multi-sig arrangement and be sent back to a regular address and then be made to be indistinguishable from all other bitcoin in circulation. If G. Ment were to lock coins in a recursive covenant which always requires their input to spend all future transactions, then those coins can never leave such a set up, are now non-fungible, and are effectively no longer bitcoin.
I'm not sure such a case is possible though - everything I've read has been very conflicting on the matter, hence my desire for links and more clarity. I'll have another look through the mailing list to see if I missed something.
1. Don't enter into such schemes to begin with
2. Don't trade with people that do
1 is easy, 2 is impossible. It is simply not possible for me to know all the different trades you are doing and whether or not you have coins in any such covenants.