There is a flaw with the OP's approach: yes if the to circles fail to intersect it means that something has to give of flex. however, the OP has not taken into account that the photo above is taken at an angle of approx 15 degrees, i.e. it is not a direct side-on view. If you take into account the parallax the rear suspension moves along the pivots without the frame having to flex.
Wrong. Do the circles cease to exist when you look at the frame from the side? The shock mounting point on the swingarm follows a circular path around the bottom bracket. The lower pivot of that link also follows a circular path, but it is a different path. The shock cannot follow both paths, so one of the pivoting objects must conform to the path of the other object, which means the swingarm must compress.
Sure. Those circles show the path of the link and the path of the rear triangle. The paths have to be the same because they both attach to each other, but the paths are different. That means that something has to flex so that they can still be attached.
The Ibis frame is full Ti, Ti is notorious for being able to flex and very rarely fatigue from it. So much so that Ibis got 5" of travel from that frame. The MacMahone frame is Cr-Mo, though. And I don't think of it as a good design, at all.