What that also implies is that there's some window during which we would believe incoming packets' sequence numbers.

This is important when overhead bytes are added to incoming packets.

If the buffer is almost empty, all incoming packets are accepted.

When the buffer is full, the probability has reached 1 and all incoming packets are dropped.

He wants to be able to control the flow of incoming packets as well, which you cannot do at the home router level.

Well, that's going to stop it again because it's going to be an unsolicited incoming packet.

There needs to be an application (service) listening on that port, accepting the incoming packets and processing them.

So it's able to detect incoming packets that are from its matching client.

The incoming packets are compared for quality, and the best one is selected.

Every incoming packet may cause the compressor/decompressor to change its internal state.