Q:

Combinational System Theoretical Question

I'm currently taking an MIT-OCW course, where it says that a system built from smaller combinational systems following the following compositional rules is combinational:

Each component of the system must itself be a combinational device.
Each input of each component must be connected a system input, or to exactly one output of another device, or to a constant voltage representing the value 0 or the value 1.
The interconnected components cannot contain any directed cycles, i.e., paths through the system from its inputs to its outputs will only visit a particular component at most once.

However, it then states:

is combinational. 
However, it looks like C is connected to two outputs of other devices - to A and B. How is this then still combinational? In general, I don't understand the point of why it would only need to be connected to exactly one output of another device.
Apologies if this is the wrong StackExchange, wasn't sure where to ask this.

A:

C has two inputs. Each input of C is connected to exactly one output of another device. Connecting two outputs together usually results in smoke,  or the mathematical equivalent, when they compete. 

