Another place where I'm just commenting to talk about currently undefined behaviour.

The assumption is that you are an honest host. If you get to this point, it means you've been excluded from the network, or your swarm is dishonest, or something to that effect.

So you enter a mode where you alert the parent (and your sibling blokchains, in case the parent is dishonest) that your swarm has failed to produce an honest block. Then there's a mess of them figuring out if you're just not connected properly (or if you're the dishonest host) and figuring out what to do with the blocks they do have. If the network has failed (or a dishonest block has provably been produced), then it goes through the emergency blockchain unloading procedure. This will be described in the paper at some point.