Just a minor update on this topic.  The IRS ran a §199A webinar for tax practitioners on May 30.  This question (which sounds self-planted with no follow-up) came up at 1:08:08 during the webinar and the IRS' response is that SEHI could reduce QBI at both the S corp and shareholder level.  They are still talking about this based solely on SEHI being attributable, generally, to a trade or business and did not address the crux of the issue.

https://www.irs.gov/businesses/small-businesses-self-employed/webinars-for-tax-practitioners#Qualifi...