(a) Equation (3) may be viewed as a formalism of synaptic plasticity - the synapse is able to change in strength in response to either use or disuse of it.
We can observe the steady state starting from the third iteration.
(c) If a weight settles at a fixed value this value is a balance between excitation and inhibition, because the rate of decreasing equals the rate of increasing of the weight value.
We can see for x = 4 w decreases without bound.
Excitatory influence is zero in this case, and inhibitory influence is positive, so the weight decreases. The formulation biased in inhibition direction.