Let's analyze the translation of
SN55.40 by mentioned by you Ven. Thanissaro:
1) Here is the Nandiya's question with the original translation of "ariyasavaka" as "a disciple of the noble ones":
"Lord, the disciple of the noble ones in whom the factors of stream entry are altogether & in every way lacking: Is he called a disciple of the noble ones who lives heedlessly?"
And here is the Buddha's answer to that question:
"Nandiya, the person in whom the factors of stream entry are altogether & in every way lacking I call an outsider, one who stands in the faction of the run-of-the-mill."
Stop! That not the answer to the Nandiya's question, it is something that has no relation to the question – it some kind of side-notes on the meaning of the "outsider".
And only after making that strange unrelated remark the Buddha is answering the Nandiya's question:
But as to how a disciple of the noble ones dwells in heedlessness and dwells in heedfulness, listen well and pay attention, I will speak.
And how, Nandiya, does a disciple of the noble ones dwell in heedlessness? There is the case where a disciple of the noble ones is endowed with verified confidence in the Awakened One…
And further, the disciple of the noble ones is endowed with verified confidence in the Dhamma…
And further, the disciple of the noble ones is endowed with verified confidence in the Saṅgha…
And further, the disciple of the noble ones is endowed with virtues that are appealing to the noble ones…
This is how a disciple of the noble ones dwells in heedlessness.
But wait! This is not the answer to the original question about "heedless life of the disciple of the noble ones in whom the factors of stream entry are altogether & in every way
lacking", it is the answer to the question completely opposite to the Nandiya's question – it is the answer to the question about "heedless life of the disciple of the noble ones in whom the factors of stream entry are altogether
present".
2) Let's now replace "disciple of the noble ones" with "noble disciple":
Here is the Nandiya's question:
"Lord, the noble disciple in whom the factors of stream entry are altogether & in every way lacking: Is he called a noble disciple who lives heedlessly?"
And here is the Buddha's answer to that question:
"Nandiya, the person in whom the factors of stream entry are altogether & in every way lacking I call an outsider, one who stands in the faction of the run-of-the-mill."
Here we have the Buddha absolutely rightfully correcting Nandiya on the implied in his question wrong understanding of the noble disciple: the person in whom the factors of stream entry are altogether & in every way lacking is an outsider, an ordinary man - that person is not a noble disciple. The Nandiya's question without such correction is simply illegitimate and cannot be rightfully answered. And only after that correction was made the Buddha answered the corrected version of the Nandiya's question:
But as to how a noble disciple dwells in heedlessness and dwells in heedfulness, listen well and pay attention, I will speak.
And how, Nandiya, does a noble disciple dwell in heedlessness? There is the case where a noble disciple is endowed with verified confidence in the Awakened One…
And further, the noble disciple is endowed with verified confidence in the Dhamma…
And further, the noble disciple is endowed with verified confidence in the Saṅgha…
And further, the noble disciple is endowed with virtues that are appealing to the noble ones…
This is how a noble disciple dwells in heedlessness.
And that answer is absolutely to the point of the Nandiya's question about the heedful life of a noble disciples.
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In the first case where "ariyasavaka" is translated as "a disciple of the noble ones" we have:
1) Nandiya with the right understanding of ariyasavakas as of someone who can be lacking the four factors of the stream-entry.
2) The Buddha who is instead of answering the question is not only making some unrelated remarks, but also answering the completely opposite question he was asked by Nandiya.
In the second case where "ariyasavaka" is translated as "a noble disciple" we have:
1) Nandiya with the wrong understanding of "ariyasavaka" as of someone who can be lacking the four factors of the stream-entry, and that's why asking illegitimate question.
2) The Buddha who is first correcting Nandiyas wrong understanding of an ariyasavaka, and after that directly answering the legitimate corrected version of the question he was asked by Nandiya.
So from the SN55.40 on account of translation of "ariyasavaka" we get:
1) either "ariyasvaka" is "a disciple of the noble ones", Nandiya with right understanding of "ariyasvaka", and the Buddha saying nonsense;
2) or "ariyasvaka" is "a noble disciple", Nandiya with wrong understanding of "ariyasvaka", and the Buddha is right on the topic.