Thanks for this nice summary, and pointing out some of the many issues not addressed in the paper. I think this statement over simplifies things a bit...
Two ways it isn't true, is dying before the break even point, or using the converted funds prematurely, as in the quote from the article I started with.
To me, the conversion problem is interesting because the answer comes down to the individuals assumptions about the future
Planning for the future does require assumptions of rates of return, life expectancy, future tax rates for you and your heirs. But to make sure we don't confuse casual readers, "dying before the breakeven point" is not a valid concern and "using converted funds prematurely" might not be.
Roth conversions are not a conventional investment where you are under water and later finally reach a breakeven point. The liability of taxes on the t-IRA balance exists, the Roth conversion is simply an attempt to even out taxable income to avoid high tax brackets at a later time. In a progressive tax system, that's the best plan.
In order for a properly sized Roth conversion to actually be a bad deal, you have to have something like:
-Bad market performance and no recovery, so the growth you expected never materializes
-A magical tax cut from our benevolent Congress so the tax rate you anticipated never arrives
-Heirs tax rates much lower than assumed
-Or maybe you counted on dying early so you thought your spouse would have a high tax rate as a single and you manage to live instead. Hopefully your spouse agrees getting you for a long time instead of extra cash was a good trade.
To the specific instance of you (and your spouse) dying early, there is less total time to get the money out of the t-IRA than there would be if you lived a long time, plus your heirs have to add this inherited IRA withdrawal on top of whatever else they are doing in their lives. Since your heirs may still be working or have their own Roth conversions to do, their effective tax rate on that unexpected inheritance is quite likely higher than if you lived a long time and took it out a bit each year in RMDs and then passed along a reduced amount to your heirs.
At the risk of repeating an illustration I used in another thread, if you convert an amount and then immediately die, you might think you are behind, but it's easy to see that's not correct as your heirs have yet to pay taxes on the t-IRA balance. If your heirs fully liquidated immediately, they would be even whether there was a Roth conversion just before death or not. Roth or no, somebody owed the taxes. In a real inheritance, they of course don't liquidate immediately, they get 10 years so the Roth has time to pull ahead unless your heirs are in lower tax brackets than you were even though they have your inheritance on top.
As for "using converted funds prematurely" making the Roth a bad deal, I would say the answer is "it depends". If it's a deductible loss like an uninsured medical emergency, the tax deduction can partially offset the taxable withdrawals from the t-IRA, so in that case, having done a Roth could be wrong. If the premature need arose because rates of return were bad, then that's an already acknowledged point.
But there are other situations where doing the Roth comes out ahead, even if you need the funds early. For instance, i-orp and its inhuman optimizer will sometimes do Roth conversions early and then use some of the converted money to cover the cash shortage that often exists before RMDs and SS kick in, as maximizing the ($ x time) of the Roth account helps the portfolio.
If returns were in line with expectations and someone just used the t-IRA for a non-deductible purpose, then to get around to needing the converted money, they had to have paid taxes on whole t-IRA balance already. That would require withdrawals at even faster rate than your plan (since it's rarely right to fully deplete the t-IRA) and therefore those unplanned withdrawals were likely at a higher tax bracket than your early Roth conversion, so the Roth would be ahead.
There's no hiding from the tax man, the tax liability exists in all cases and properly planned Roth conversions are the best chance of maximizing your after tax money.