I am really reluctant to say this because I am not completely positive and I am of the opinion that Josh is one of the smartest people in the communtiy...
I believe that the answer to the first question is Example A. We have a stream that we add an email to every week on Friday. After the send, the leads are all marked Exhasuted because there is no more content in the stream for the next cast. This is true until we add the next email and the leads all move back to exhausted = False.
We haven't had anyone miss an email yet. To me this indicates that the exhausted status is updated based on the absence of content immediately following the send, not following a missed cast.
Does that make sense?