encrypting with loop-AES-v3.0a and no gpg-key doesn't give 'multi-key-v3' except for swap

[Petersen <castrolkonto2@xxxxxxxx>]

http://www.spinics.net/lists/crypto/msg02628.html states that loop-aes 
2.0f can't use multi-key encryption without using gpg-key also.

I use the latest, loop-AES-v3.0a (README of November 27 2004 ), but only 
swap-encryption reports multi-key-v3, losetup -a reports 'AES256' only 
for drives created with

   losetup -e AES256 -itercountk=300 ....

- so no multi-key-v3. Am I sitting on a timebomp (as Jari puts it), or 
does multi-key-v3 only appear with gpg-keys?

I didn't build (with) gpg because I want to have a change of recreating 
my data in case of loss of gpg-key. Could that be why 'make tests' 
fails? For the same reason I don't use password seed; it is also 
difficult to figure out how to do it, from reading the README.

Is the security level of my setup (AES256, no gpg, no seed, 
itercountk=300) to weak to bother?

Could you explain how the watermark attack work?




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