I would still be interested in the practical application of your view. E.g.: Is Cruz not a citizen? Is the USCIS categorization and policy wrong?
All the evidence points to him being a citizen by Act of Congress. I believe his mother met the residency requirements, that she was a citizen of the US at the time Ted was born, that she and Ted's father were married, and I also believe Cruz met the citizenship retention requirements.
-- Is the USCIS categorization and policy wrong? --
I'd call it "imprecise," but in a way that is useful for USCIS operative purposes. The vast majority of persons who submit claims of US citizenship for adjudication, on operation of 8 USC 1401 - 8 USC 1407, and 8 USC 1409 submit their claims to the State Department, not to USCIS. The State Department has its own set of "imprecisions" that suit its internal operation.