I remember reading this when it was published, as I was living in a college dorm at the time and strongly considered using this method to produce a master key. I didn't, because I couldn't think of anything I'd want to do with the master key once I had it. But I enjoyed knowing that I could make one if I'd wanted to.
I had plenty of legitimate uses for a master key, but I didn't make one because once 2 or 3 people know you have a master key you get blamed for every single misplaced object in the whole damn dorm.
Don't you need (up to) `N cut depths - 1` keys per pin? E.g. if there are 4 possible cut depths for a pin, and your key has depth 3 on pin 1, you need to (potentially) test depths 1, 2, and 4 -- and if none of them work, your key shares a depth with the master key.