First off what do you mean RAW, and what alternate reading
RAW = Rules As Written, as opposed to Rules As Intended (which we really only know when a writer chips in with the underlying thoughts behind a specific rule).
What I meant by "alternate reading" is alternative to how you seem to read the power.
Your reading is definitely not wrong, but it's not the only way to interpret the text either.
An example: You use 6 refresh worth of powers and completely bungle the the Discipline defense against hunger, for an end result of Mediocre (+0). This means you have 6 hunger stress incoming.
Your reading: Take a Minor Consequence (-2 stress) and lose Inhuman Strength (-2 stress), leaving 2 stress. You check off the second Hunger Stress box.
My "alternate" reading: Take a Moderate Consequence (-4 stress), thus leaving 2 stress. I check off the second stress box
and thereby have to lose Inhuman Strength. (This is the "lose powers equal to the amount of stress taken" part. I haven't actually
taken the stress prior to checking off the stress box.)
Both of these readings are supported by different sections of text within the same power. Neither reading is definitively wrong, thus the power is unclearly written.
I think the confusion comes from the next line down "If you have no powers left to lose and are
taken out by a feeding failure, you are actually taken out"
The line before seems quite clear, you can lose powers or take consequences. The issue for me is that they don't seem to mesh because it never says that you take stress except after losing all the powers and refusing (or being unable) to take consequences.
My inclination has changed the more I read it. I would basically treat hunger as a regular attack, with each power treated as a consequence of appropriate value for the purpose of hunger only. So you have Mild, Moderate, Severe, Extreme, Inhuman Strength, Inhuman Recovery as all possible consequences, with the exception that you HAVE to use the power ones before you reach taken out.
Which is basically Killkings reading, and
I think it might be the intended reading. It is however unclear, because for every one who finds that reading absolutely obvious, there's one who finds the other, harsher, reading obvious.
This lack of clarity is a
part of why I've chosen to not use it in the specific instance of my game featuring Red Court Infected as PC's. There are other reasons as well, but the confusion as to how it's actually supposed to work is what sparked me taking a hard look at it. That hard looked made me realize that there were other things about both Feeding Dependency, the RCI template, and how they interact that I didn't like, and have since house-ruled with input from the forums. (The result is essentially the first section of this thread, before it became a discussion on the merits and confusions of Feeding Dependency.)
I
may still use Feeding Dependency (in one form of another) with other hunger-affected beings, but that is for future games to show.