What you believe is unfair is the exact intent of Congress when these code sections were modified as part of the PATH Act of 2015.  These are not inventions or interpretations of the IRS.

I'm not sure why your client was told that they have to be back in the States to apply for an SSN for their child when there is a well-established routine process to submit the application through/at the US Embassy in Japan and the military post would have guided him on that.  I'm actually surprised that they went through the process at the Embassy to get their baby a passport but not the SSN.