Initially, the protocol prohibited a cooperative close of the channel and the return of base funds if there were any disputed HTLCs. This rule was intended to impose a minimal self-griefing cost, which was the forfeiture of the base funds, to discourage disputes.

However, it has been clarified that despite this prohibition, there was no mandate to close the channel unilaterally following a disputed HTLC. Parties could continue to add new HTLCs without resolving the dispute, a point that may not have been clear previously. Recognizing the need for adjustment, the protocol will be updated to allow for a cooperative close that returns the base funds to both parties, except for the single HTLC involved in the disagreement. This amendment aims to make the cost associated with disputes more proportional by limiting the penalty to the specific HTLC in question rather than affecting the entire base funds.

This change reflects a nuanced understanding of dispute resolution within the protocol and indicates a shift towards a more flexible and fair approach. The update will be documented in the paper to ensure clarity and transparency regarding the protocol's operations and the options available to parties involved in HTLC disputes.