If I read the paper correctly, the iterative approach considered as wasteful, and two-stage waterfall is recommended instead: documentation and planing at first stage, to find weak points first, then execution of the plan. IMHO, it was designed for times when computer time was expensive.
I did a few projects in waterfall style about 20+ years ago, but my memories are faint. Our PM used a UML modeling tool to model classes and relationships, then exported it into Java. We wrote a lot of useless documentation. I developed a good habit to write documentation immediately, when memory is fresh, to avoid the pain of writing it later.
I don't get the point of Figure 4 in the .pdf, I see htat and I hear process process process, don't skip process even when it makes no sense.
You can actually tell that the methodology was developed for a different time period, when you would have to schedule time in order to run your program on the mainframe, instead of just hitting build on your machine.
The point of figure 4 is to admit that the neat step-to-step iterations in fig. 3 don't always happens. Sometimes testing reveals flaws that are bigger than the preceding coding step, and you have to back up to design or even requirements. But then once you back up, you still have to go through the remaining steps without skipping them.
Ex: Testing reveals a corner-case that was never accounted for in the design. You can't just re-code, you have to go back up and redesign, then code the new design, then retest.
Royce's recommendations to minimize these problems are
a) more and better design, and
b) more and better documentation
In contrast, the Agile approach is to try to slice the work into finer and finer tasks, so these same activities can span a few sprints. It works in the small, but loses the forest for the trees.
[1] http://www-scf.usc.edu/~csci201/lectures/Lecture11/royce1970...