My read is that they're criticizing moving the reasoning (more) into the latent space, such that not even researchers/safety-evaluators can actually see what's going on.
Of course this still then has a 'trust me, bro' feel to it, but making it outright impossible to reasonably inspect the CoT is a significantly larger and riskier step, IMO.
At least there are technical reasons to argue in favour of moving some CoT into latent space.
Encrypting CoT is just plain nuts yet we’ve all accepted it as normal.