Read an article yesterday on G00gle devaluing exchanged links

[RedCherry]

I subscribe to the Search Engine News, and read their monthly article on Google where they say in part:

A member of Google's Search Quality team recently posted the following link building information in his blog...

Google has tremendously refined its link-weighting algorithms. We have more people working on Google's link-weighting for quality control and to correct issues we find. So nowadays, undermining the PageRank algorithm is likely to result in the loss of the ability of link-selling sites to pass on reputation via links to other sites.

I'm wondering if this is also undermining having a directory, and having every free site link back to your main page, and category page, with links that are identical in nature. It seems like that could be painting as they call it in the article "a big target on your site" that you might be artificially inflating your link pop with reciprocal links.

After reading that, I've decided to remove my category links off my main two link list lists, and provide some general links with different wording, and to invite submitters to invent their own links and own words, so the linking looks less "artifical". What does everyone else think of this in terms of LL and reciprocal links?