They have changed the wording a bit so that it no longer says you aren't obligated to send it back, it says you aren't obliated to send it back at your own expense.
Remember that the requestor is not required to send a problem book back at his or her expense. The sender of a problem book does risk losing credit, book and postage; this is the incentive not to send problem books.
If you want a problem book back you can provide a stamped, self-addressed envelope to the requestor by snail mail (or you can give the requestor an extra Book Credit to compensate for postage, if both of you agree on that).
Refund and postage compensation must be completed first - before the requestor returns the book (= it is not OK to wait to refund credit until getting a problem book back in the mail, or to expect the requestor to send the book back before getting postage compensation as described above).
My personal opinion is that if the sender has refunded the credit and will pay to get the book back, unless there is something that precludes the receiver from being able to send it back, then they didn't pay for it and the right thing to do would be to send it back.