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It’s an 8 question multiple choice score card, not 46 questions. You’ve misconstrued the complexity of determining whether it’s a brace or a stock.
Im going out on a limb here and will say that I don't think the approach here is dumb, but that the quagmire of rules, rights and regulations can only result in weird and strange rules in the end. 
I can see why the ATF would want to close the loophole for pistol braces, especially since they are such a blatant way of breaking the spirit of the law while technically being inside it. You even mentioned how they marketing itself acknowledges this. Personally I have never seen anybody actually using a pistol brace for its intended use either online or in person before I saw your linked picture.
Anyway: They want to change those rules. They can't just outright ban them, because the ATF can't make new laws and there is nothing unlawful about pistol braces. Besides there are actually some who needs them for their intended purpose.
This means they have to find another way to regulate them. And SBR's are where pistol braces are most widely used so it makes sense to go at it from that angle. So the ATF deems: "All pistol stabilising braces are now rifle stocks". This is pretty nifty as it accomplishes two things. 1: Now a lot of "pistols" are now SBR's unless they adhere to the two pages with 8 questions you linked to and has to be regulated through tax stamps 2. People who needs a pistol brace are no longer discriminated against and can use them for their intended use.
Now I won't go into the whole "tax stamp" thing because frankly it is such an odd concept to me and besides I can't understand people who are willing to spend hundreds or even thousands for a SBR only to try to skirt the law to save $200. But that is besides the point. For some weird reason people have to pay this tax for a SBR and the ATF are the ones who apparently can define what a SBR is.
But the end result is that if people has to pay a tax stamp to have a stock anyway then they will chose a proper one and not one that is slightly-less-than-ideal, meaning that pistol braces will slowly only be used for their original purpose. Problems regarding pistol braces are now solved according to the ATF.
So while the end result might be confusing their approach makes a lot of sense imo. 
Caveat: Im not from the US, so my view on gun laws and gun culture might not be 100% up to date. >

The spirit of the law was that handguns should be on the NFA, and SBRs needed to be too so people can’t cut a rifle to handgun size to circumvent the handgun restriction. But handguns got taken out, and we’re left with this nonsensical mess. >

I actually didn't know that handguns were included in the initial draft.  I always thought the SBR rules targeted Tommy Guns specifically, but now it seems they're just an artifact of forgotten handgun regulation.  Interesting. >

When you get to a machine gun, it’s just defined as a machine gun, it doesn’t matter how long the barrel is. >

lol good point >

The thing I don’t understand is this was marketed with a “wink” but we’re upset at the ATF for noticing it? If we’re privately acknowledging the loophole but whining when it gets closed, don’t we already realize we had it coming? >

The problem is, the atf has previously stated that these do not meet the legal definition of an sbr…now they are changing their mind. This is very similar to the recent bump stock ruling by the 5th circuit and in cases of ambiguous definitions with criminal consequences, the Rule of Lenity applies and the courts should find in favor of the defendants, which means that this really should have to go through Congress. >

For the record, they haven’t waived the tax. They’ve put it into forbearance, meaning you don’t have to pay it now but they can come collect any time they want. And you better believe the feds are gonna come collect >

I mean I’m pretty cynical when it comes to the ATF so take it with a grain of salt. But anyway, the ATF wants it to be confusing, they want it to seem scary and on some level they want people to be accidentally committing felony weapons violations. They want it confusing and scary so people are turned off on the idea and don’t get it, they want people committing felonies on accident so if someone get popped for something small it turns into a big deal and it turn deters more people from getting them.
So if you look at it for face value, yes it’s stupid because it doesn’t really define anything. But if you look at through the lens of they don’t want you to have it, this is the best option short of banning it. >

I'm apparently more cynical than you: the ATF wants them confusing so that when expedient, any gun owner has a pretty good chance of being found guilty of some gun crime. >

I mean, I don’t see how requiring a “tax stamp” isn’t already infringement in the first place. In spirit, if the government is allowed to have Comanche gunships, then the populace is allowed to have them, too.  Not sure why bracing a gun against your shoulder somehow amounts to a necessary exception to people’s rights. 
I guess in order to frame this as a direct response to your view, it isn’t the ATF’s rules being arbitrary and confusing that make it dumb, since the NFA is already a violation of Constitutional rights. Their intent is already to abuse their power to exert authority they were never supposed to have in the first place, so them doing so via this new rule is par for the course, “working as intended,” so to speak.