I think it's highly likely that Apple was being honest and that the HSM service was not vulnerable to this attack. That's consistent (as you say) with this being a separate, highly-audited implementation, and frankly consistent with what Apple said--and to save, what, $200k, they have no real reason to lie to a researcher here.
To your second point, while this is indeed a big change in attack surface, I am not sure it's as problematic as you say. Doesn't the iCloud backup basically contain (for most users) all of the device contents--photos, messages, etc--that an attacker would want? Conversely, users want to be able to restore their iCloud backups from a new i-device if they lose their existing one, ideally without having to know more than the lockscreen PIN.
Given that, the two systems--the cloud system and the i-device--are storing mostly-identical data, offering mostly the same security guarantees (hardware-backed key derivation from a weak PIN, rate limiting), and the only issue is that this is just a second hardware security module that's separate from the one in the i-device.
For users who have turned off cloud backup, this might be a bad tradeoff. (Maybe turning off cloud backup turns off the HSM/PIN syncing?) But for most users, the gain in usability seems likely to far outweigh the hypothetical additional risk.