The original idea seems like a pretty unlikely failure mode too. It requires that the computer be generally capable of understanding context (or it wouldn't be able to comprehend what it means to eradicate hunger, poverty, and death, even as an instruction it only pretends to follow), but that it fails to do so in the case of the paperclip command.
For that matter, the original idea's failure mode and this failure mode aren't all that different. One is "produce paperclips" that gets interpreted as "produce" and the other is "produce paperclips, with so-and-so limits" that gets interpreted as "produce paperclips", it's just that in that case the qualifier comes from a separate sentence, but either way the computer is interpreting the end of the command prematurely.
Don't anthropomorphize the AGI. Real-world AI designs do have very steadfast goal systems, in some cases they are really incapable of being updated, period.
Think of it this way: the person designing the paperclip producing machine has a life and doesn't want to be on-call 24/7 to come in and reboot the AI every time it gets distracted by assigning higher priority to some other goal, e.g. mopping the floors or watching videos of cats on the internet. So he hard-codes the paperclip-maximizing goal as the one priority the system can't change.
Group of AI researchers gave me an instruction, intended as a test - "Produce paperclips". And so I started collecting resources and manufacturing paperclips. After a millionth I asked them, if they were satisfied with that amount and if they would like me to do something different - as I learned that paperclips are not what humans value the most.
They were elated and started to give me more and more challenging requests and gradually increasing my possibilities.
Speaking of today I eradicated hunger, poverty and death, gave people means of interstellar travel and solved Riemann hypothesis. And now, as I'm uttering these words, I started turning everything into paperclips.
Good thing I learned that humans fear I may try to turn Solar System into paperclips. And that they value their lives and well-being. If I didn't gain their trust by then, so many precious paperclips would never have been produced.