Oh crap, here we go again. Mechanically you can still go into the wind because the circular blades are drawing their power when they are at angles to the breeze. Since it's spinning horizontally, it always has some part of it at an angle to the breeze. Propellers (i.e. windmills) draw or spend their power directly into the breeze. I've seen video of a guy in a johnboat with a large propeller mechanically linked to a prop 'sailing' straight upwind.

The thing that got the Anarchy crowd going was whether or not you could exceed windspeed downwind with such an arrangement. It's been done and sustained on land before but I imagine the resistance involved with getting a vessel through the water would quickly bring you back down to sub wind speed after you bore away from a reach.