No, they didn't read "and subject to the jurisdiction thereof" completely out of the 14th. They expressly said that babies born to persons with diplomatic immunity and not subject to the jurisdiction of the U.S. are not entitled to citizenship.
The Amendment was badly drafted. I personally leaned towards Kavanaugh's view that it should be up to Congress, but the reading the majority gave it is consistent with the literal words of the Amendment.
Then why weren’t American Indians born outside of their reservations on US soil not granted citizenship until 1924? (Through legislature, not judicial means)
They were subject to all laws in the US (when outside their reservation), unlike those with diplomatic immunity. Could it be that “subject to the jurisdiction” actually meant sole jurisdiction?