In response to your second Bad point, I think Cassidy's argument should be phrased along the lines of: "And how did the killer spill that blood? Easy: He [used the gun] at the crime scene!" In this case, [used the gun] is a yellow statement, and Assault Rifle contradicts this statement, because its truth bullet description indicates that it was never fired. The Knife bullet wouldn't work, because it doesn't refute the fact that the gun is a valid option.
However, I do believe that the game should have a special way to handle statement-bullet combinations that make sense on their face, but aren't airtight enough to serve as a refutation or agreement. For example, if you use the Knife bullet on the statement [used the gun], this should happen:
Damon: "{COUNTER} No, that's wrong! There was another potential murder weapon: the bloody knife, also found at the crime scene. It's entirely possible he could have used that instead."
Cassidy: "{COUNTER} No way! You trying to say some lame knife was superior to a big, scary gun?"
Damon: "It's not a matter of which weapon is superior; the point is, an alternative weapon could have been used!"
Wolfgang: "I think we're getting a bit ahead of ourselves, Damon. Before we consider the knife, let's first establish why the rifle is not a viable candidate for the murder weapon."
Damon: (I see; this calls for a more direct approach. Cassidy is convinced that the assault rifle was the murder weapon. But if I show what state the rifle was in when we found it...)
{Nonstop Debate resumes; no HP is lost}
This should be roughly the pattern that close-but-no-cigar statement/bullet combinations should follow. The game affirms that the logic is sound, then points out a minor flaw which prevents this particular combo from decisively ending the debate, and gives the player a hint toward the correct solution. Ideally, no HP should be lost.