Am I missing something about this gradient tool?

No, you're not wrong: Photoshop features one of the most horrid and limited gradient editors in the image editor business. It's just something PS users put up with, it seems. I really don't want to start a rant here, but in a nutshell:

- colour controls for bitmap and vector gradients are separated for some obscure reason.

- only the dreadfully ancient and clunky gradient editor dialog is available to edit gradients.

- on-screen widget control is limited to the initial drag movement when using the bitmap gradient tool.

- there is no other on-screen widget available in Photoshop to control a gradient.

- bitmap gradients are destructive. Once made, they cannot be edited.

- Photoshop gradients still lack any blending algorithm control. This results in rather not-so-nice multi-colour stop blending, and requires the user to add more stops than what is really necessary.

Here is a quick demonstration video of a competing image editor's on-screen gradient widget, and how simple and effective it is to control a NON-DESTRUCTIVE bitmap gradient. These can be just as easily used for layer masks, and remain non-destructive. It think this should serve as an example to the Photoshop team that time did not stand still. Photoshop's gradient tools are a disgrace.

Sorry to be so blunt. It's time they entered the 20th century.

Photoshop is a raster application, not vector.   You can't adjust it once you have created it as you can in Illustrator.

You need to set the grad palette sliders to the degree of transparency you want  - and combine that with the amount you drag the Grad Tool cursor across the image.

The first Gradient is not done in Photoshop, the author is comparing two different Gradients from two different applications.