Seller takes the item into inventory, opens its property box and sees that the Next Owner permissions are +M -C +T still. This is because the Inventory Item has its permissions bits set based on the Asset when it is taken.
(It is important to note that an Inventory Item is a link with some meta information to an actual Asset. An Inventory Item is NOT an Asset)
Seller changes the permissions on the Inventory Item to -M -C +T. NOTE: This doesn't change any permissions on the Asset! Only on the inventory item.
Seller gives the item to Buyer. Buyer looks at the permissions of the Inventory Item and sees Current Owner permissions of -M -C +T. Also Next Owner permissions are not enabled.
Buyer rezes the item, and notes the object has Current Owner permissions of -M -C +T. Yay! That is correct! Everyone is happy!
(It is important to note that an Inventory Item is a link with some meta information to an actual Asset. An Inventory Item is NOT an Asset)
Seller changes the permissions on the Inventory Item to -M -C +T. NOTE: This doesn't change any permissions on the Asset! Only on the inventory item.
Seller gives the item to Buyer. Buyer looks at the permissions of the Inventory Item and sees Current Owner permissions of -M -C +T. Also Next Owner permissions are not enabled.
Buyer rezes the item, and notes the object has Current Owner permissions of -M -C +T. Yay! That is correct! Everyone is happy!
You changed the end product from -M +C -T to -M -C +T, but shouldn't it be +M -C +T?
Sorry, I don't want to harp on about this, but in your example it had modify permission first, then the modify perm was removed in the inventory, the next owner receives it, it still has no modify permission, but after rezzing it the modify perm is back again.
/Edit
I forgot the link: /139/7c/145451/1.html