It looks like the file is replaced every write, too, which removes most of the hard use cases. It really seems to me that he could just use PyNaCl to encrypt the files and not have to bother with all the custom crypto. I don't know what the intentions and tradeoffs are, though, so I can't be sure.

Yeah, good point.

You could make similar threat-model arguments as are made about FDE, but that's not really a good excuse when authentication would be technically easy in this case.