I don't think we actually disagree on this. The physical curriculum is not the entirety of the art. And even that part can't be transmitted error-free. So, let's say you manage to replicate your instructor's forms and physical techniques 95%. If you try to teach exactly what he taught, there will be a 5% degradation. On top of that, there's the transmission of ideas and understanding, which will be less complete/exact than the physical techniques. If you only transmit exactly the information and understanding you got from him, there would be further degradation.
Of course, you wouldn't do that. You'd teach the physical curriculum as best you could, including where you've found ways that worked better for you than your sifu taught (which, in some cases, will be things you just didn't get from him, though he did them, too). You'd also pass along the best understanding you could, rather than just the bits you got directly from your instructor. That "best you can" is what prevents the degradation.