A difficulty in understanding why there is a problem in the function constructed for Q.1.1.8(c) in Alan Pollack and Guillemin

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I am asking about part(c) of this question:

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The solution is given below:

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But I could not understand in the solution of (c) why the implicit function $x \rightarrow r$ is not smooth at 0 and where we used this function and how tweaking the function that we constructed can solve this problem ? more clearly I could not understand the last 2 sentences in the solution of (c), could anyone explain them for me please?