Have you misread the paper perhaps? From the experimental section, this cocktail of reagents forms 1,1-Dichlorobenzocyclobutene (presumably by formal 2+2 cycloaddition between the benzyne and dichloroethene). They then treat this compound with H2SO4 to convert the dichloromethylene group into a ketone so the compound becomes Benzocyclobutenone. It isnt clear to me what the role of the propylene oxide is, perhaps to mop up the HCl formed in the benzyne formation?