I am also open to the possibility that Demandred not recognizing Flinn at the Cleansing was an honest mistake on RJ's part and that it was only then that he only then decided to make Demandred not-Taim. It fits with the assertion in WH 13 that Demandred and Osan'gar are supposed to be watching Rand. That would help to explain why he didn't manage to come up with a solid alternative for Taimandred before his death.
I know why you think that the Demandred-recruits-Taim alternative works; I agree it works as a fit-the-basic-facts type scenario. I just don't think it was the plan when LOC was published because their physical descriptions were similar (which makes the Mirror more foolproof; Mesaana's alt also resembles her), and Taim spoke not as if he knew of the 2nd Age worldview from his teacher and wanted to imitate it, but as if he were really conditioned by the 2nd Age worldview, and myriad other small reasons.
His importance as a character was elevated and tied to Demandred in the structure of the book (in the bookends) and tied to Rand as an archrival to replace Ishamael. And sure, it's possible that RJ decided to elevate a 3rd-Ager in this way, but then that leaves Demandred hanging with very different role than either Mesaana or Semirhage, having elevated a 3rd-Ager to a position where he could easily challenge Demandred himself.
So ultimately I can see the merit in the argument that "too obvious" is too simplistic an explanation for why RJ changed his mind. It's natural for fans to knee-jerk this reason because it's hard for us to understand why RJ would go and screw up such a good thing. There are many possibilities for when and why, but I still find it very hard to believe he changed his mind before he published LOC.
Though after I saw those files, Terez and me argued quite a bit about when they were from (and it's very much open for debate, as many RJ files were partially updated only, retaining bits of outdated stuff). She tended to think it that the "plan" for Taim to be Demandred rather than being his pawn survived for some time beyond LOC before RJ finally changed his mind. I disagreed with her on that.
My opinion is that these two notes belong to the preparatory phase of LOC. They were true enough between TFOH and LOC, but were no longer his plan by the time LOC was finished. One of those quote concerns the rationale for how it ends (Rand's rescue by Taim) and the other concerns the resolution of Asmodean's murder, identifying Demandred as his killer.
I do not believe RJ stuck to that plan until the final published version of LOC, though I tend to believe he did write LOC with this in mind, then at the end he made cosmetic changes, notably to the prologue. The reason is the very same why we could easily eliminate Demandred as suspect in Asmodean's murder: in the LOC prologue, he doesn't know Asmodean is dead, it's the Dark One who reveals this to him.
The other argument is that in the final version of LOC, RJ rather set things up to send Osan'gar/Dashiva to the Black Tower, where he would oversee Taim yet would be forbidden to reveal to him that he was a Chosen and not a high rank DF (that bit in the Encyclopedia is indeed from the notes, not Harriet's interpretation or some such). That version is of course incompatible with Demandred being Taim, SH would not have sent a high ranking DF with Aginor's strength to openly "oversee" the guy Demandred portrays.
I think that RJ's original idea was for Demandred/Taim to play the role of Osan'gar, that is by having him take control of a retinue of male channelers who would eventually betray and attack Rand. I think the idea rapidly evolved in the process of plotting LOC into making Taim only Demandred's pawn at the Black Tower, but since the betrayal of Rand by his retinue was important, to introduce another player, Osan'gar, to be that traitor.
I think when RJ made that decision, many of the Taim chapters were already written, and he decided that the allusions that Taim might be Demandred he had put in there would work nicely as a red herring. In fact, I think he accentuated them even more (I would have expected Demandred to have enough self-control not to appear blatantly hateful and envious or enter pissing contests with Rand....). He did, however, polish the prologue of LOC to eliminate completely Demandred as a suspect in Asmodean's murder. Was it when he chose Graendal as the killer? We'll never know if the switch happened that early, but by the next book he began planting clues, and to eliminate other Chosen (Sammael, Semi, Mesaana) so that finally only Graendal was viable if the killer was a Forsaken.
I don't think RJ's motivation for canning Taimandred was that people "figured it out". The clues were too blatant, he had to know it would turn immediately into a popular theory. One possible motive is that he decided that he rather liked how Demandred (that he used as a character for the first time) played out in LOC as would-be leader of the survivors, the dynamic with Sem and Mesaana, and Granedal, and it's rather Sammael he would eliminate early. He opted for the best of both worlds, ie: he had Demandred pull Taim's strings instead, and that gave him the opportunity to develop Taim into a full wannabe Demandre with delusions of grandeur as to his real place in the Shadow.
