Confusion about a formal definition of PRAM consistency
When they define PRAM (page 11 of the arxiv preprint) 
they actually state that vis is a partial order (in particular, transitive):


  We define PRAM consistency by requiring the visibility partial order to be a superset of session
  order:
  $$\text{PRAM} \triangleq so \subseteq vis.$$


Thus, the offending arrow in your diagram, from $w(x)0$ to $r(x)0$, is superfluous, as it is in the transitive closure of the other vis arrows.
So the $w(x)1$ write is already visible at the time when you would do $r(x)0$, so that read does not occur.