Yup, they have *a lot* of work ahead of them, and I completely agree with the majority of your points.
The EU agrees with you to the point that they have severely hobbled Tesla's AP in Europe. In an attempt to make it "safer", they limited the amount of control authority the AP had. This had the very obvious effect of making it less safe; right as you're in the middle of a steep curve, the AP hits the limits of it's authority, and hands control back over to you. /facepalm. Tesla has since had to put in a warning in EU vehicles that tells the driver in advance that it is approaching the limits of its control authority.
And your experience so far is exactly why so many AP 1 owners still think that AP 1 was better. The core functionality of it *did* work better, but unfortunately the technology behind it wasn't scalable enough to build complete FSD off of it.
Elon keeps saying that LIDAR for FSD is a fool's errand. He says that LIDAR has its place, as SpaceX uses LIDAR for the final docking maneuver to dock with the ISS. But it isn't a good tool for FSD. IMO, he's going to learn that it's going to take a combination of his current visual object recognition system
enhanced by LIDAR to really get to complete FSD. I
truly hope I'm wrong. But that's going a bit off topic.