It's just a one time pad with a novel key distribution system, where instead of directly sharing the key, you share the information necessary to extract the key from a random stream. In addition to not introucing any new security advantages, it brings in a potential weakness - what if the source of random numbers isn't as random as the designer thinks? Someone could potentially retrieve the key without having access to the key extraction information...
This is kind of silly ...<p>It's basically just a one-time-pad, with a magical shared pad that can't be intercepted. They just assume away all the problems with OTPs.