The author is missing a key element in his model of life, one which significantly affects the outcome of the thought experiment: his simple loops are independent, they have no shared state. Real existence is not so clean---living beings are constantly being altered by their environment, and conversely altering it. It would be impossible to simply 'save the state' of a living being without saving the state of the entire universe in which it resides (the virtual machine). This makes reincarnation (or at least the very simple model presented in the article) impossible.