I have reviewed the file briefly, but without making a detailed dump of the problem scanlines. The file does appear to be incorrect, and GDAL responds to the error produced by libtiff.
Arguably it would be nice if GDAL could continue on, capturing as much data as possible, but that hasn't been typical policy in GDAL and I am hesitant to change it for fear of hiding serious error during processing.
I did notice that the tiff2rgba (or perhaps tiffcp) can be used to convert the file, with minimal data loss.