No, they never stated that any shoulder stocked pistol was legal; some folks thought and wrote that, but it was never official and was never finalized.
Your assessment of the current situation is correct. But they went directly from "stocked pistols are SBR's" to "stocked pistols are C&R and no longer NFA IF the stock is original". That is not too inconsistent, since it is on the same lines as other C&R definitions, like a K.98k with a sporter stock is not a C&R since the gun is not in original condition. So actually, BATFE relaxed the original ruling, not tightened it. Too late, of course, for the original Mauser and Luger stocks that were destroyed or had the "iron" welded up or smashed or the guns that had stock lugs or slots ground off or welded up.
I registered a pre-war BHP with an Inglis stock during the 1968 amnesty, just as an SBR (pistol with stock). Several years ago, I sold that gun, with the stock, to a friend. We did the usual Form 4 paperwork and paid the tax. THEN he told me that he had an original BHP pre-war stock, made by FN. I pointed out, too late, that if he had just given me the Belgian stock, I could have put it with the gun, asked that the gun be removed from the NFRTR because it had the original stock, and saved both the Form 4 trouble and $200. Oooops!.