Frabjous day, search works in the new copy (book-21-07-04.pdf)! So does PDF Expert’s underline feature. An entirely scientific random sample of pages indicates that the new version appears identical to the old one, except for the index, which is a little different in the new version (more compact?).
Now if we could marry the improvements you made in book-21-07-04.pdf with the table of contents version
that would be even better. The TOC version not only allows me to navigate to chapters from the Preview.app sidebar, but it also properly supports "go to page": If I tell Preview to jump to page 45, I jump to the real page 45. In book-21-07-04.pdf, there's still no TOC in the Preview sidebar, and when I tell Preview to jump to page 45, I land on the real page 27. However, the TOC version is not searchable, and yours is.