Your explanation makes sense and you are correct - you have identified an issue with the original game design. I'll need to do some additional work to resolve this.
Thanks for pointing it out :-)
Hi Darkyeoman. Thanks for your question and my apologies for the delayed reply.
You have understood the level 1 rule correctly. However, the loss condition you mention is only triggered if you cannot perform the royal action after performing the royal ceremony (i.e., moving a cube from the royal host to the adjacent waiter). Therefore, you can avoid losing the game by taking a different action and waiting to perform the royal action until after you have filled all the serving dishes.
Hopefully that makes more sense now :-)