How should I interpret this note on diffusion of the internal state of a PRNG?
I see no issue here about bit diffusion; if $\textit{MIX-i}$ has a problem, so does $\textit{MIX}$.

The reason is simple, $\textit{MIX-i}$ is precisely $\textit{MIX}$, but backwards.  Hence, if $\textit{MIX}$ starting at initial state $S_0$ and ending at final state $S_n$, would generate the output:

$B_0, B_1, B_2, ..., B_{n-2}, B_{n-1}, B_n$

then $\textit{MIX-i}$, starting at initial state $S_n$, would generate the output:

$B_n, B_{n-1}, B_{n-2}, ..., B_2, B_1, B_0$

If the sequence $B_n, B_{n-1}, B_{n-2}, ..., B_2, B_1, B_0$ has a problem (either against a statistical analysis, or against a cryptographical attack), then $B_0, B_1, B_2, ..., B_{n-2}, B_{n-1}, B_n$ should have the same problem.

Now, is $\textit{MIX}$ (or $\textit{MIX-i}$) a good random number generator – either statistically, or as a cryptographically secure random number generator?  Well, I don't know if it's a good statistical rng (it does have an obvious state recovery attack that takes $O(2^{64})$ time, hence I believe it is disqualified from being considered a CSRNG); however the fact that hidden bits from $A, C, D$ are not mixed in as well as they may be are not an automatic disqualification.