The article sites that children were able to fall out of the recliner despite the use of the harness, so I'd say it's a valid concern. The government is taking the company to court because they have been uncooperative with the recall order.
Actually the company had been working with CPSC. All the current warning labels were designed with CPSC and got their approval. And the changes from the first two models to the current one were done in response to CPSC concerns (and again CPSC signed off on what the Nap Nanny people did). The CPSC changed it's mind after another child died (which is terrible) because the parents were idiots- using it in a crib, without a cover, not strapped in and with loose blankets in the crib. (Here is the link to Nap Nanny's site with their statement: http://www.napnanny.com/)
I have a feeling in time this will be the latest Bumbo/crib bumper kind of situation.