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The problem is one of notation for modular arithmetic, at the point of the question reading if y^2 equals (x * v^e) % n then.. Likely the textbook is about if $y^2\equiv x\cdot v^e\pmod n$ then.. By definition of $a\equiv b\pmod n$, that holds if and only if $n$ divides $a-b$ (or equivalently: $|b-a|$ is a multiple of $n$). In the question, 437 ...


The original 1986 Fiat-Shamir paper can be found here. The subsequent Feige-Fiat-Shamir 1988 paper can be found here, and contains the answer (Section 3): The $S_j$ (which are witnesses to the quadratic residuosity character of the $I_j$) are effectively hidden by the difficulty of extracting square roots $\bmod n$, and thus A can establish his ...

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