https://nebuchadnezzar-megolm.github.io/
Original paper.
An open network for secure, decentralized communication
Again.
And again in a part that they added to make e2ee more convenient for users that are only security LARPing anyways.
As far as I am concerned, I use Matrix as a replacement for Slack/Discord/IRC, where I absolutely don't count on e2ee. And Matrix does that really well. For e2ee direct messaging, I use alternatives like Signal or Threema.
How does XMPP with omemo handle these situations?
AFAIK they don't exist because OMEMO keys are device and not account specific, so this entire class of attack surface does not exist.