I don't understand how the situation above is a 'quirk' and not a straightforward example of deflation. The price of a typical TV - now represented in the basket of goods as a 32in TV - has fallen.
The fact that lower prices might lead people to buy larger TVs is no more surprising than a fall in the price of meat leading people to buy more steak.
The fact that lower prices might lead people to buy larger TVs is no more surprising than a fall in the price of meat leading people to buy more steak.