This sounds an awful lot like each transaction can consume exactly one UTXO, but can have multiple UTXO outputs. This would cause progressive "shattering" of the UTXO set into millions of low-value "dust" UTXOs, a problem that Bitcoin is struggling with (specifically, how best to incentivize "cleaning up" the UTXO set by making transactions with multiple inputs, even though that increases the overall transaction size).

"We adopt what is commonly known as Bitcoin’s unspent transaction output (UTXO) model. In this model, clients are authenticated and issue cryptographically signed transactions that fully consume an existing UTXO and issue new UTXOs."