UI issues

Try this. Uninstall both Photoshop and Lightroom Classic. Reinstall Photoshop (whatever version you prefer) and then Lightroom Classic. This order is important. 

I am not going to comment on your personal reactions to the software, which are a matter for you, apart from on the specific issue of "logic". Very often we find most logical whatever we are most accustomed to. And there is a large user-base that has used Lightroom Classic - and its predecessor product naming - for many years, and whose familiarity with the present interface is a given, and thus IMO a constraint on any revolution in what the software does, or in how we get it to do that. There has been some more measured evolution nonetheless, and will continue to be so I expect.

The detection of a given version of Photoshop with which to "partner", is largely about order of relative installation of Lightroom Classic and of the particular PS version number or variant (such as a Beta).  That detection is what is seen in the upper part of the External Editing config screen in your screenshot. 

The lower part of that screenshot appears to show just one set of configuration but in fact is an interface for setting up, and for later updating or removing, any number of external-editing named presets. These presets free you up from reliance only on whatever particular PS instance and settings may be, or may not be, shown in the upper part of the dialog. So that can employ literally any editing program or utility which is capable of opening a file saved to the format chosen (not limited to Photoshop): as invoked by browsing to that program executable. 

These external editing presets are then available to choose instead of the default detected PS whenever you want, as part of starting a fresh external edit for an image. A new external file is saved first and only then is the chosen external app told to open that, so that constitutes a different workflow behind the scenes. Consequently that workflow is image-by-image and cannot involve sending multiple images for HDR or Pano combining, nor use as PS Layers, of a single file. Those options are specific to the more integrated partnering with PS (if any) seen in the upper part of that dialog.

I think once the desired version of PS is chosen / detected after reinstall as needed, things will get a lot easier. So, activating under the Ctrl+E / Cmd+E shortcut. Otherwise, benefits for these external editing presets include if one exceptionally may want to send out images to an unusual external file format + bit depth + colorspace combination.