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Is the point to illustrate that Knuth is unaware of elementary concepts such as code reuse....

In fact, Knuth considers reusable code to be a "menace."

> To me, "re-editable code" is much, much better than an untouchable black box or toolkit. (Knuth)

Probably Knuth misunderstood the concept

He didn't misunderstand the concept. He emphasized the needs for source access to libraries

Yes, that's true. However, code reuse is somehow opposed to source access to libraries, which should not be necessary true.