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If the mask paper is the same size as the waldo photo, one can trivially tell where waldo is by just looking at the location of the cutout

I think for this to work, the piece of paper with the cutout must be much larger than the full waldo photo. The actual cutout would always be in the center of this mask paper. Then the waldo photo can be moved around behind this mask.

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But then you cannot prove anymore that you know where Waldo is, no?

Previously, the proof relied on the alignment between the picture and mask being constant, but this is no longer the case. Now wherever Waldo actually is, every mask fits since you can just freely move around the picture.

To align the cutout with Waldo, you need to know where he is. Since the entire picture would be hidden behind the mask, the other person won't know where in the picture that location is, but by aligning the mask cutout you can prove _your_ knowledge about Waldo's location.

The point of the proof is to demonstrate that the prover knows where Waldo is, not to convey Waldo's location to proof recipient.

Good catch

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