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There is a way out of this apparent paradox. The Fundamental Theorem is not wrong.

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I don't see much of a paradox in this example. It's fairly simple:

The only place we make money is from his flop call when he's the one with the gutshot. But, we don't make ALL of his flop call, because sometimes he will complete his gutshot allowing him a discount on his loss. The smaller the pot is at that point, the smaller the discount he gets. When he makes less the times he hits, we make more.