Where exactly do you see an error here?

And the implication is done like one would except, so if you have two state sets A and B and you want to compute States(A -> B) then the result is:

B U (S \ A) with S being the complete state set S := {s_{0}, ..., s_{7}}

So state s_{i} is part of States(A -> B) if either s_{i} is part of set B or s_{i} is not part of set A. Or you can put it like that:

If a state s_{i} is part of set A then it must be also part of set B. If this condition holds true, then s_{i} is also element of States(A -> B) otherwise it isn't.