> Take your claim that "hiking" is a noun: To me, it analyzes as an inflection of a verb ("hike")
I wouldn't say you're wrong about this. However, I'd be much more willing to defend the idea that, as it appears here, "hiking" is a one-word noun phrase containing a verb form (and that compound nouns are formed NP-NP, not N-N). Traditional grammar has gifted us with a rich vocabulary of specialized terms for specialized syntactic functions, and the traditional term for a verb form which functions as a noun is "gerund". (Um, technically, infinitive forms can also function as nouns.)
I'll pause here to defend myself from an argument you haven't made: there are people who will say that "beef" in "beef stew" is an adjective simply because it modifies a noun. They're wrong. I say that a gerund really is a verb form acting as a noun. The difference is that I'm saying that gerunds can appear in basically all syntactic contexts that permit noun phrases, so the definition I'm using is syntactic (as appropriate for a syntactic term of art like "noun") rather than semantic. I'm not saying gerunds are nouns because they refer to objects -- I'm saying they're nouns because they can be the subjects of verbs (and otherwise appear where nouns appear). To me, the best analysis is just that noun phrases can be constructed from verb forms. Linking back to the subject at hand, I'd agree that "hiking", the word, is not a noun in the same way that "iron", the word, is one, but I am saying that this "hiking", as used in context, is just as much of a noun phrase as "this rusted iron" is.
> Specifically, when looking at the list "crummy old worn-out tan leather gusseted hiking", with modifiers lined up in order of significance, what about the word "hiking" jumps out at you as plainly different in use or meaning?
In all honesty, what jumps out at me is that all of the others are descriptions, while it would be odd to use "hiking" that way. For example, in a certain style of speech, you could see something like this:
Get out and take your crummy, old, worn-out, leather, gusseted, boots with you.
(In actual rhetoric, the descriptors would probably be different.)
But it's completely impossible for the "hiking" of "hiking boots" to be delimited by commas (in speech, emphatic pauses) that way. If you did it, the meaning of "hiking" would change -- it would mean that the boots were out on a hike. This demonstrates that "hiking" is not a descriptor for "boots" -- rather, "hiking boots" is a single unit. (Yes, with internal structure.)
> To me, the most intellectually honest thing is to see compound nouns as a sort of epicycle-style theory to explain why words in our non-modifier class are actually used as modifiers all the time, just according to a subtly different set of rules than applies to the modifier class.
English is way more liberal with modifiers than that.
He gave me his I'm-going-to-kill-you look.
I agree that language requires a bit of a fuzzy lens. But grammar is very much a real thing.