DR-
Yes, your summary is more or less the argument I am making.
But really, I should not say "I am making," since I am only endorsing the CE article's conclusions.
With regard to St. Pius X's Catholic Encyclopedia generally, it is important to remember that it was published precisely to rebut the Masonic encyclopedia in areas such as this (i.e., Galileo, Crusades, Inquisition, etc.).
Consequently, it would be rather ironic that an encyclopedia designed to rebut Protestant and Masonic errors, should itself be in error on one of the most obvious articles in which it would need to rebut Prot/Masonic contentions.
In any case, it is not clear to me how indefectability can be destroyed on the basis of a Holy Office decree.