Suppose I claimed it's impossible to understand Shakespeare with all the consonants are deleted, leaving only vowels. Most people would accept that claim without pedantically asking me to define "understand". Same story here. I'm arguing that certain environments, when shoe-horned into the traditional RL model, are like Shakespeare with all the consonants removed.

The agent might (or might not) find progressively more and more optimal solutions to the interpreted environment, but not to the true environment (unless by dumb luck), because it does not see what the true environment actually is. For example, in the concrete environment described above, you could suppose completing Task C takes more steps than Task B. Then the agent is likely to conclude, on the basis of the misleading arctan rewards, that Task C is not worth the extra steps. Depending on the extra steps, this conclusion could be badly false.