I would assume that eclipxe meant that the software shipped with the Nook does not allow for on-the-fly text modification. Even if it did, this is the only occurrence of text substitution that has been seen, so the fault still lies with the publisher.
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The device software reads data from flash and renders it in pixels on the screen. It is absolutely possible for it to modify the text as it does so.
I would assume that eclipxe meant that the software shipped with the Nook does not allow for on-the-fly text modification. Even if it did, this is the only occurrence of text substitution that has been seen, so the fault still lies with the publisher.
Not necessarily. There are many more moving pieces to this, especially considering DRM.