[Miscellaneous Android Development] OfficerJimLahey:
Looks like I will have to be home for me to look at this. Give me some hours - at work currently (13:30), then I have post-work meetings until mid-evening.

It looks like, though I cannot confirm, that the set_perm* function uses a different number of parameters than set_metadata*.

set_perm_recursive(user, group, mode, directory)

EDIT:

Based on what this sed script does, I figured out that set_metadata* has way too many parameters than set_perm*:

e.g.

set_metadata_recursive("/system", "uid", 0, "gid", 0, "dmode", 0755, "fmode", 0644, "capabilities", 0x0, "selabel", "u:object_r:system_file:s0");

So I ran the sed script to clean up set_metadata, then manually cleaned up the recursives'. The challenge, and I may be able to fix this with additional lines, is that the directory permission (+ executable) will be added to the individual files under that folder. So files not meant to be executable suddenly can be (and not do anything).

Also, the link I mentioned earlier, cites back to a time when recovery is ages old (Cupcake era), and I'm not sure if "SYSTEM:bin" (for example) is the needed format. So, here is the updated updater script:

# updater-script-00_HEAD
# This updater-script has been automatically generated through ArchiKitchen (http://xdaforums.com/showthread.php?t=2597220)
run_program("/sbin/mount", "-t", "auto", "/system");
delete_recursive("/system");
show_progress(1.0, 1730);
package_extract_dir("system", "/system");
# updater-script-10_SYMLINKS
symlink("mksh", "/system/bin/sh");
symlink("Roboto-Bold.ttf", "/system/fonts/DroidSans-Bold.ttf");
symlink("Roboto-Regular.ttf", "/system/fonts/DroidSans.ttf");
symlink("toolbox", "/system/bin/cat");
symlink("toolbox", "/system/bin/chmod");
symlink("toolbox", "/system/bin/chown");
symlink("toolbox", "/system/bin/cmp");
symlink("toolbox", "/system/bin/cp");
symlink("toolbox", "/system/bin/date");
symlink("toolbox", "/system/bin/dd");
symlink("toolbox", "/system/bin/df");
symlink("toolbox", "/system/bin/dmesg");
symlink("toolbox", "/system/bin/du");
symlink("toolbox", "/system/bin/getevent");
symlink("toolbox", "/system/bin/getprop");
symlink("toolbox", "/system/bin/grep");
symlink("toolbox", "/system/bin/hd");
symlink("toolbox", "/system/bin/id");
symlink("toolbox", "/system/bin/ifconfig");
symlink("toolbox", "/system/bin/iftop");
symlink("toolbox", "/system/bin/insmod");
symlink("toolbox", "/system/bin/ioctl");
symlink("toolbox", "/system/bin/ionice");
symlink("toolbox", "/system/bin/kill");
symlink("toolbox", "/system/bin/ln");
symlink("toolbox", "/system/bin/log");
symlink("toolbox", "/system/bin/ls");
symlink("toolbox", "/system/bin/lsmod");
symlink("toolbox", "/system/bin/lsof");
symlink("toolbox", "/system/bin/md5");
symlink("toolbox", "/system/bin/mkdir");
symlink("toolbox", "/system/bin/mount");
symlink("toolbox", "/system/bin/mv");
symlink("toolbox", "/system/bin/nandread");
symlink("toolbox", "/system/bin/netstat");
symlink("toolbox", "/system/bin/newfs_msdos");
symlink("toolbox", "/system/bin/notify");
symlink("toolbox", "/system/bin/printenv");
symlink("toolbox", "/system/bin/ps");
symlink("toolbox", "/system/bin/reboot");
symlink("toolbox", "/system/bin/renice");
symlink("toolbox", "/system/bin/rm");
symlink("toolbox", "/system/bin/rmdir");
symlink("toolbox", "/system/bin/rmmod");
symlink("toolbox", "/system/bin/route");
symlink("toolbox", "/system/bin/schedtop");
symlink("toolbox", "/system/bin/sendevent");
symlink("toolbox", "/system/bin/setconsole");
symlink("toolbox", "/system/bin/setprop");
symlink("toolbox", "/system/bin/sleep");
symlink("toolbox", "/system/bin/smd");
symlink("toolbox", "/system/bin/start");
symlink("toolbox", "/system/bin/stop");
symlink("toolbox", "/system/bin/sync");
symlink("toolbox", "/system/bin/top");
symlink("toolbox", "/system/bin/touch");
symlink("toolbox", "/system/bin/umount");
symlink("toolbox", "/system/bin/uptime");
symlink("toolbox", "/system/bin/vmstat");
symlink("toolbox", "/system/bin/watchprops");
symlink("toolbox", "/system/bin/wipe");
# updater-script-20_PERMISSIONS
set_perm_recursive(0, 0, 0755, "/system");
set_perm_recursive(0, 2000, 0755, "/system/bin");
set_perm(0, 2000, 0755, "/system/bin/app_process");
set_perm(0, 2000, 0755, "/system/bin/bootanimation");
set_perm(0, 2000, 0755, "/system/bin/bugreport");
set_perm(0, 2000, 0755, "/system/bin/debuggerd");
set_perm(0, 2000, 0755, "/system/bin/dhcpcd");
set_perm(0, 2000, 0755, "/system/bin/dnsmasq");
set_perm(0, 2000, 0755, "/system/bin/drmserver");
set_perm(0, 2000, 0755, "/system/bin/dumpstate");
set_perm(0, 2000, 0755, "/system/bin/dumpsys");
set_perm(0, 2000, 0755, "/system/bin/hostapd");
set_perm(0, 2000, 0755, "/system/bin/installd");
set_perm(0, 1000, 0750, "/system/bin/iptables");
set_perm(0, 2000, 0755, "/system/bin/keystore");
set_perm(0, 2000, 0755, "/system/bin/logwrapper");
set_perm(0, 2000, 0755, "/system/bin/mdnsd");
set_perm(0, 2000, 0755, "/system/bin/mediaserver");
set_perm(0, 2000, 0755, "/system/bin/mksh");
set_perm(0, 2000, 0755, "/system/bin/mtpd");
set_perm(0, 3003, 02750, "/system/bin/netcfg");
set_perm(0, 2000, 0755, "/system/bin/netd");
set_perm(0, 0, 0755, "/system/bin/ping");
set_perm(0, 2000, 0755, "/system/bin/pppd");
set_perm(0, 2000, 0755, "/system/bin/racoon");
set_perm(0, 2000, 0755, "/system/bin/rild");
set_perm(0, 2000, 0750, "/system/bin/run-as");
set_perm(0, 2000, 0755, "/system/bin/sdcard");
set_perm(0, 2000, 0755, "/system/bin/servicemanager");
set_perm(0, 2000, 0755, "/system/bin/surfaceflinger");
set_perm(0, 1000, 0750, "/system/bin/tc");
set_perm(0, 2000, 0755, "/system/bin/vold");
set_perm(0, 2000, 0755, "/system/bin/wpa_supplicant");
set_metadata_recursive(1002, 1002, 0755, "/system/etc/bluetooth");
set_perm(0, 0, 0644, "/system/etc/bluetooth/auto_pair_devlist.conf");
set_perm(0, 0, 0644, "/system/etc/bluetooth/bt_did.conf");
set_perm(0, 0, 0644, "/system/etc/bluetooth/bt_stack.conf");
set_perm_recursive(0, 0, 0755, "/system/etc/dhcpcd");
set_perm(1014, 2000, 0550, "/system/etc/dhcpcd/dhcpcd-run-hooks");
set_perm_recursive(0, 0, 0755, "/system/etc/ppp");
set_perm_recursive(0, 0, 0755, "/system/lib");
set_perm_recursive(0, 2000, 0755, "/system/vendor"");
set_perm(0, 2000, 0755, "/system/vendor/etc");
set_perm(0, 2000, 0755, "/system/vendor/firmware");
set_perm(0, 2000, 0755, "/system/vendor/lib");
set_perm_recursive(0, 2000, 0755, "/system/vendor/lib/drm");
set_perm(0, 0, 0644, "/system/vendor/lib/drm/libdrmwvmplugin.so");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt/models");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt/models/detection");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt/models/detection/multi_pose_face_landmark_detectors.7");
set_perm(0, 2000, 0755, "/system/vendor/pittpatt/models/detection/yaw_roll_face_detectors.6");
set_perm_recursive(0, 2000, 0755, "/system/vendor/pittpatt/models/recognition");
set_perm_recursive(0, 2000, 0755, "/system/xbin");
# updater-script-80_EXEC
# updater-script-85_USER
# This updater-script segment isn't touched by ArchiKitchen
# You can add your own entries here
# updater-script-90_KERNEL
package_extract_file("boot.img", "/dev/block/platform/emmc/by-name/boot");
# updater-script-91_MODEM
# updater-script-99_TAIL
unmount("/system");

Here's hoping this does what is necessary.