I still don't see how this is true, either in this case or in Dynamicland - neither of those seem to OCR programs from the piece of paper. So you still do classical programming alone, and only get to play with the results. A piece of paper may contain the actual program behind system's reaction to it, or it may contain a picture of a cat - the contents are irrelevant; it's the dots that matter.
If you write small programs that interact with other programs, then rearranging them on the floor/table becomes a form of programming (similar to how combining UNIX-style programs in shell scripts is a high-level form of programming).
So even when playing just with the papers, you can be programming.
There's also the interplay of arranging papers, and live-editing the code in a particular piece of paper. In Dynamicland, the projector highlights printed code in green/red to visualize diffs.
You can sketch a UI element on the paper (eg a rectangle and token for a numerical slider), then go back to code the interactivity. Units in the code are inches on the table. Subtle things like that break you free from the laptop.
When you want to "commit" your code changes, you print a new version.
One of the more interesting things that I've seen in Dynamicland is that it allows you to create programs that modify other programs - basically the beginnings of a physical IDE. You can use a scrubber or dial to modify a constant, as a very basic first step.
IMHO, the ability to create new physical interfaces to editing code might allow for new programming paradigms to pop up, or better interfaces for people to develop logic in their own domain. Someone could combine a calculator interface and a context-sensitive variable selection interface to write arithmetic logic using an interface/"syntax" that they already understand, and debug all the way through that with a testbed program that allows the programmer to set variables to specific values and work through how the math works. You can have yet another program which describes a program as a flowchart and allows people to edit it that way.
The thing is, as you make the IDE physical, you get to invite people to interact with it more - rather than staring at a screen, suddenly you're livecoding, you can have multiple people working on it at once. "Ah, but doesn't that fail if you do this? Sets some variables on the testbed", or "I can fix the UI while you update that calculation".
And then, when your accountant has something on a piece of paper that works, they could point a "make this an app on my computer" program at it and bring it out of Dynamicland, into their workplace.
