Another problem with systems. If I remember correctly, Davis is referring to the density difference to the film curve as caused by flare. One, he applies the effects of flare to the film curve. This is an old approach which is more of a construct than reality. Flare affects the optical image and not the film curve. Two, his calculation is more of an approximation of the influence of flare. He doesn't use the flare equation. Or in other words a system.He mentions a small flare amount of 0,02 as a starting standard. What you (Stephen) say is much more.
If you really want to understand sensitometry, you need to read something more academic. Photographic Materials and Processes would be an excellent start. Theory of the Photographic Process 3rd edition is a little more advanced.