Look at the pictures in the article: those buildings weren't ever intended to be permanent structures. They're built with bare lumber directly on unprepared dirt, with no attempt at a foundation, in an area that OP points out is regularly flooded. If Croatia hadn't torn them down they'd have washed away.

It looks like a fun project, but I wouldn't consider it evidence that anyone there was fooled by the founder into thinking they could actually live there permanently.