It's the struggle to report more and more users every quarter that is damaging; this leads to the concept of users and their contact list as the property of websites and dark patterns like this.
Is there any evidence LinkedIn reports all members email contacts as LinkedIn users?
I have no idea if LinkedIn reports ghost users as real in annual reports but I'm sure they'll report users, and creating ghosts and deceiving users into thinking they are real will increase dramatically the number of signups for them, so it will help their overall stats, even if those people then do nothing with the account after they discover Robin didn't really invite them and should never have been on the site. This cult of collecting users as trophies or even faking them is both damaging to brands and user-hostile; in the long term it will fail and LinkedIn already has trust issues.
The g+ post just displays OP's confusion at "connect" really meaning "invite" in instances where contacts don't have a LinkedIn account.
The LinkedIn page is deliberately deceptive (showing a dead person as a member who can be added to someone's network), in an attempt to goose their stats and get more signups. There's no confusion here, and I'm surprised that you'd try to characterise it as that, deception might be a better word. If it means invite, it should say invite, and it should be presented as sending an email to a harvested contact, not inviting an already current LinkedIn member. This kind of dark pattern is where you end up if you trust certain metrics blindly and always make the modification which incrementally increases your metric (say user signups), regardless of other consequences. It is clearly designed to deceive.
Neither the article nor the title actually talk about inflating numbers, which is how I read it at first too. They only talk about actually increasing the number of users, by sending out invites: "Another example of the lengths LinkedIn will go to in order to increase its user base."
In this post, there is no claim that LinkedIn is claiming in any reported numbers the ghost users that it presents to people who allow it to import their contacts.
So what you have done here is called the straw man fallacy.
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"[...]LinkedIn is misrepresenting who has an account and does this to entice such people to create one when they receive a 'would like to connect' email. In doing so, it misleads its users into thinking they are connecting with people who already use the service."
The g+ post just displays OP's confusion at "connect" really meaning "invite" in instances where contacts don't have a LinkedIn account.