Welcome to the Q&A Forum

My recommendation was just that. Take away all excessive linking with subcagegories and even primary categories and instead add more generic, but traffic hub important footer links. This is how I "always" recommend to clients, but since all of the panda updates and the external SEO partner (who is responsible for the links in the first place) protested, I just wanted to get some pro input from all of the SEO pros here at moz

Hey Per, Good question. The On-Page report actually utilizes Broad Keyword Use in it's grading. For situations just like you mentioned. Not every keyword is utilizing proper grammar so we've padded it out a bit to allow for extenuating circumstances. Google will do similar with their rankings unless someone uses quotes to ask for an exact match (weird, but it happens). I hope that helps. Cheers, Joel.