It claims that this solves the dilution of reward token issue by making it the job of the curators to pick only real proposals - but ignores that this flaw is a result of the reward token issuance being a completely broken mechanism which does not perform as it should. This means that it is effectively impossible to leave theDAO even if you successfully split. Here I will explain why.
For those of you who haven't read through the contract code; The way it works is that every time a payment is made as the result of a successful proposal reward tokens equal to the amount of wei paid are issued. with 1 wei = to 1 reward token. Reward tokens are 'held' by either theDAO or they are transferred when someone splits off. Ownership of reward tokens is how DTH entitlement to any reward payment received by theDAO is calculated.
The main problem is that reward tokens are not proposal specific - the logic is simply: the more money theDAO spends the more reward tokens get produced. This is the cause of the 'dilution' attack - an ability of the parentDAO to reduce the value of the reward tokens held by child DAO's by approving proposals for large sums which generate more reward tokens but feed the money back into theDAO.
But the dilution attack is just on aspect of how the reward token system doesn't work and why leaving theDAO doesn't mean what you think it does.
Issue 1: Never leave me!
You are a DTH and are pretty stoked that the first proposal to theDAO has just passed; slockit has just received 2 million ether and you couldn't be happier about it. But then dumbcorp shows up and asks for 3 million ether to club baby seals - it looks like its going to pass and you want out of theDAO. So you quickly split and take your share of the reward tokens (5%) to your new DAO - this means that you should receive 5% of the rewards produced by slockit from now until forever right? WRONG!! Your reward tokens entitle you to a share of all the proceeds of every proposal ever approved by theDAO even if you leave. Because dumbcorp's proposal passed and they wasted all their money - you now only get 2% (20000000.05/5000000) of the reward sent to theDAO by slock.it. This effectively means you will in part finance every single proposal that theDAO green lights. *Every. Single. One.** Meaning you just clubbed some seals.
Issue 2: The price is wrong!
You are a DTH and theDAO has just funded slock.it 2 million ether (approx 30m USD), when something amazing happens - the price of ether goes up 10x!! Everyone is pretty excited by this news and a lot of people exit the DAO (50% split off). theDAO still has plenty of cash though so it can keep on funding projects except now we have a problem... Because of the way reward tokens are calculated any rewards generated by subsequent proposals will mostly go to people who invested in slock.it and left. Reward tokens are calculated by the number of wei spent in proposals - if there is a dramatic (10x) upward change in the dollar value of ether a proposal that costs theDAO 30m dollars afterward will give those left in theDAO less than 10% of the reward tokens that were generated for the slock.it proposal. This means that those individuals who left theDAO are going to receive close to 45% of any rewards generated by this second proposal - despite not voting for it or 'contributing' to it.
There are all sorts of other weird and distorted outcomes that this mechanism produces when people leave or the price changes and it needs to be fixed before any proposals pay out ether. The long and short of it is that generic reward tokens need to be dropped entirely and replaced with unique tokens generated for each proposal - this is the only way to fix these issues.
TLDR: When you take part in a proposal you are not buying into the proposal, you are buying into theDAO and all its subsequent decisions - and the mechanism for doing this is so broken it is incredibly unlikely that you will get your 'fair share'.
