Hypothesis
Decay would make velvet worms appear progressively more primitive, as experiments on chordates showed, so badly decayed lobopodian fossils would be misplaced towards the stem of the panarthropod tree.
What failed
Experimental decay of onychophorans produced no significant stemward slippage, so this particular bias does not explain interpretations of non-mineralised lobopodian fossils; decay was far from unbiased in other ways, changing body proportions significantly, affecting anatomical features at very different rates and causing correlated loss of topologically associated characters.
Broken assumption
The decay-driven stemward slippage found in chordates generalises to other animal groups.
Why
The authors reason that slippage bites where phylogenetically informative characters sit in decay-prone tissues, which is not the case for lobopodians, and that this makes claims of preserved neural tissue and complex musculature in Cambrian lobopodians hard to reconcile with their results.
From the published paper: Murdock et al. BMC Evolutionary Biology, 2014. ↗CC BY