Jim - I think you should watch it again. The selling site links value 'just goes away' - that tells me that those links just become worthless.
After all the question that was asked was 'If a site linking to mine gets caught selling links, what happens to my site?'
The only thing to take notice is that this question was directed to a person who was not a buyer, but rather just happened to have their link on the site. Cutts even holds up an index card with two groups going away from the seller - 'buying' and 'you'.
how they could tell the difference between a buyer and non-buyer on a site caught for selling links is beyond me, but he did take the time to differentiate the two.