I just read about the contradiction on BS01, but it still doesn't make sense. A new alternate universe is created every time someone makes a decision, but the decision was Matoro's decision to hesitate, AFTER he met and was influenced by Velika. If the decision was of the GB to take a different body, then Velika would have a different personality, and as a result may not have wound up on Voya Nui. That, or even something unrelated, could've changed the course of history.
Unless, of course, they're following the Flashpoint model, in which the change of said decision caused a ripple effect that altered past events in order to sustain itself.
Granted, it's more of a time travel example, but since the outcome of that is usually ending up in an alternate universe anyway, I'd argue that it still fits the current discussion.
Regarding the Stone thing--I'd really like to see the rules regarding what's Stone and what's Earth to be more clearly defined. There is a way around this--simply assign different elements to different parts of nature. Ice and Water are sovereign elements because one embodies the oceans, rivers and lakes of the planet; and the other embodies snow and polar ice caps. Same with Stone and Earth; the former encompasses sand and loose rocks, and the latter encompasses the ground itself and whatever comprises it. This also makes it easier to define separate power sets for each, as well as avoid having to dance around the scientific perspective from which none of this makes any sense.
For their G3 Concept, TTV tried to address this issue by keeping Stone more or less as is and fusing Earth and Plantlife into a singular element.
Personally, I'm not too terribly fond of the idea myself, despite the whole soil/plant correlation actually somewhat making sense, but I figured I'd bring it up anyway as a possible solution.