Circuit yields a peculiar contradiction between KCL, KVL and Faraday's law
The wrong assumption is that any point on the wires 'A' and 'B' are equivalent and that they constitute discrete "nodes".

If you have a straight wire segment in a changing magnetic field, there will be a voltage gradient along the wire.  This doesn't result in a current flow, because the EMF of the magnetic field is "holding" the charges and keeping them from redistributing to balance the voltage.

Basically, the simple forms of KVL only applies when there is no EMF.

You can actually see the same problem with an even simpler circuit:







simulate this circuit &ndash; Schematic created using CircuitLab

The EMF induces a current, and the the current generates a voltage drop across R1, but those are the same node!.  Again, there is a voltage gradient across the wire connecting the two terminals of R1 in order to make everything work right.