I believe Kevin Wilson said that Karai should be spawned into that scenario. There is no correction for this scenario in the official FAQ/errata, so I believe the current official word on it is that it is printed correctly.
It is literally impossible for it to be printed correctly. It contradicts itself in too many places. On FB, Kevin said that someone else designed that scenario, so he needed to check with them. I never saw a followup to that, although I suppose I missed it.