Ran some numbers for this, looks like they're assuming 2.3% inflation each year.

If they had withdrawn 40000 initially, all other figures being equal, the total remaining after 30 years is 1.8m in their "bad" scenario. You'd still be fine withdrawing 53000 to start with.

Taking a very pessimistic view of the first three years all at -10% interest, initially withdrawing 40000 you'd run out of money after 28 years.