What they're saying is that the error for a vector increases with r, which is true.
Trivially, with r=0, the error is 0, regardless of how heavily the direction is quantized. Larger r means larger absolute error in the reconstructed vector.
Trivially, with r=0, the error is 0, regardless of how heavily the direction is quantized. Larger r means larger absolute error in the reconstructed vector.
It is expected that bigger vectors have proportionally bigger error, nothing can be done by the quantizer about that.