All that really says is that natural born citizen has not been defined by a court. That's reasonable, actually. The Constitution gave Congress, not the courts, the power to define it when it gave Congress the power to establish a uniform rule of naturalization and to make all laws necessary to implement their rules.
Congress decided that some had to be naturalized and that others didn't. If you don't have to be naturalized then you are a citizen at birth, as the FAM says the overseas children are.
The point of quoting the FAM in my last post was to demonstrate that the U.S. government endorses the concept of statutory citizenship. It makes no guarantee that citizenship granted pursuant to a statute is equivalent to citizenship granted by the 14th Amendment of the U.S. Constitution.
In Rogers v. Bellei, SCOTUS stipulates that citizenship granted at birth by statute is a Congressional generosity to which such citizens have no constitutional right. Further, the Court says that if Congress had wanted to do so it could have forced such citizens to go through the more arduous process of naturalization.
So, while you and I agree that Congress has the power to say who requires naturalization and who doesn't. It seems wrong to me that Ted Cruz has no constitutional right to his citizenship (remember SCOTUS said it's up to Congress) but the child of an illegal who is born on U.S. soil does have a constitutional right to his citizenship under the 14th Amendment. The former may be revoked by law; the latter may not.