[dfox]

The issue is that you cannot directly pick one of the outputs using the entropy, you have to use some kind of probabilistic algorithm to traverse the state space and find valid output. When the PRNG's cycle is smaller than the output space then the output distribution is obviously non-uniform. This might seem like inconsequential observation with CSPRNG, but depending on how exactly the state traversal works, such constructions can have real output spaces that are several orders of magnitude smaller than cycle of the used RNG. (to the extent that when used with (CS)PRNG with 128b state the output bias is observable from practical amount of outputs)