Best is read Jim's papers.
And you can confidently state that momentum conservation is demonstrated in these writings?
Your metaphor was practically worthless since it broke at the first and most important step.
I can confidently say momentum is conserved from the explanation I already gave. In order to conserve momentum, you have to consider the universe as the system. If you don't, you'll get what appears a conservation violation because momentum is being transferred between the thruster and the rest of the universe. If you do choose the universe as the system, it should be obvious no violation occurs.
The question of how the missing momentum is actually missing from the rest of the universe is a separate question. To understand the answer to that question, you'll want to have a graduate understanding of field theory and read Jim's papers.
The analogy is a good one used in it's proper range. The question asked of it is not obvious to most people so the analogy doesn't break down. It is still good for explaining how momentum is transferred between the two parts of a system, a person walking and the planet on the one hand, and the M-E thruster and the universe on the other. The fact that a closed universe cannot be displaced (nor can it rotate) is not salient to the issue.
But you knew that, didn't you.
The question is a good one and comes up in real studies on Mach. I don't want to disparage it, but it is a separate question from the conservation issue.
Let me try again to make the conservation issue more plain. It's not just momentum that needs to be conserved, it's also matter that need to be conserved.
Think for a moment what is happening inside the active mass of the thruster. At one moment, the mass is normal. In the next quarter phase, it fluctuates positively. Lets say you have 1 gram of active mass and you fluctuate it 50%--so now you have 1.5 grams of mass. If you don't recognize the mass is coming from the gravinertial flow into the thruster, then you'll think you see a conservation violation. You HAVE to use the entire universe as your system, and Mach's Principle HAS to be true. If it's not, these thrusters absolutely cannot work.
"Courage is not just a virtue, but the form of every virtue at the testing point." C. S. Lewis