1. "Lack" is a vt. instead of a vi. In D, the prep., in, indicates that "lacking" here is not a verb but an adj. This idea is proved by Longman. From Longman: "Do not use the verb lack before 'in' or 'of': We lack ideas (NOT We lack in/of ideas). However, you can use the phrases be lacking in and a lack: We are lacking in ideas OR We have a lack of ideas."
2. "Verbal modifier" here does not necessarily mean "a modifer for verbs". "Verbal" could also mean "informal" or "oral" besides the adj. of verbs. Therefore, "....but so much... as to be difficult to absorb is an awkward and unidiomatic verbal modifier" only states that "so...as to be" here is a wrong expression and also less formal. The subject of the first part of the sentence is "students", but the the subject of the second one is not. Therefore, "so as to" is not equivalent to "so that" here. In another word, "so that" is required, and it cannot be replaced by "so as to".
3. "lacking so much in math skills" isn't the same as "so lacking in math skills".
lacking so much........"so" modifies "much"
so lacking..................."so" modifies "lacking"
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