It's a simple geometric distribution (worth a google/wiki), which in and of itself is a justification why eventual annihilation occurs with probability 1. It's worth noting that the question assumes they can pass by each other without dying - i.e. they only die at vertices.
However their argument is simpler; it simply says that at any given stage of the scenario P(eventually die) = P(die on this move) + P(don't die this move)*P(eventually die), which can be solved algebraically as they did. The argument is simply additivity and multiplicity of probabilities.