Key-dependent encryption in TAHOE-LAFS
There are no known dangers or attacks from this construction.  I agree with the quote from the TAHOE-LFS paper.  I would find it quite surprising if this use of the key material introduced some special weakness.  I can't prove it, but based upon my professional judgement, this is probably far from the biggest risk to your security -- it is very unlikely that this is the weakest link in the system.  It is far more likely that the weakest link is something else (e.g., endpoint security, the human processes, social engineering).  So, personally I wouldn't worry about this.