Since I just now learned about that link, I haven't read the book to know, but I have always been interested in finding out if the ability to create smaller and smaller machines is possible by having an outer machine which manufactures an inner, smaller, copy of itself, apply the process of induction, define the termination criteria, ..., profit!
Or, maybe I'm thinking about the problem all wrong -- it's not the actual construction machinery that's the problem, it's providing the input materials to each step (gears, levers, fasteners, wiring(?), etc)
There's a Factorio-clone hiding in this problem ...