No it's not, we're not ignoring losses or illegal moves at all, they are counted as losses and that's how you arrive at 1400.

It's a (theoretically) 1400 player which plays significantly better then 1400 when it knows the lines, but makes bad or illegal moves when it doesn't, and that play averages out to be around your typical 1400 player. Functionally is just what a 1400 player already is, but with higher extremes and lower lows.

The article does not ignore the losses. In fact, it used a rule stricter than FIDE rules to trigger losses on illegal moves.