Thank you for taking the time and effort to explain in such clear detail why this idea is a lot more complicated, and ultimately less attractive, than it appears.
Building on your discussion near the end concerning why any carbon inputs to the process would be magnified, the same logic applies in reverse for the low-carbon inputs used into this process: their benefits would be shrunk, compared to other uses in which they more directly displaced high-carbon fuels like coal or fuel oil. Fundamentally, Audi is mistakenly--for understandable reasons--drawing the "envelope" for its analysis too close to the vehicle, rather than encompassing the broader energy system where the renewable energy sources it needs as inputs function.
It's hard to avoid concluding that this is a publicity, or perhaps more apt, political stunt. Audi builds highly refined cars based mainly on a technology that its home government's policies are intended to make obsolete. This demonstration is clearly aimed at the politicians behind those policies.
I can understand why Audi might deem it necessary to demonstrate another pathway, aside from running their ICE cars on H2, for reaching zero emissions without producing only EVs. However, that doesn't mean it will ever go into mass production, especially since Germany has turned its back on the most practical energy source for such a process, nuclear power. As a practical matter, the emissions per km of diesel hybrids running on petroleum diesel are probably low enough already to meet Germany's national emissions reduction goals to mid-century, if the bulk of the decarbonization occurs in the power sector, where there are more and better options available.