That was the main question of the keel, it drew 9' in measurement trim but could not sail in 9' of water, as articulated by DC in his book. Tony Watts and his team decided that was how the boat is measured, not as it is sailing.
But they didn't measure the static load water line. They measured a line parallel and above it. In effect the rule added something to the LWL to take into account expected dynamic changes while still encouraging some overhang. There was no consideration in the rule for boats with winged keels.
There was nothing in the rule about a separate rudder at the stern and a small trim tab left on the keel either, or the reason partialy due to the keels getting smaller and the loss of contol with the rudder so far forward and too small to be effective, or twin rudders fore and aft with a fin and bulb for a keel. There were a number of tweaks made to the rule, like the freeboard adjustment that hurt Freedom when she was altered. There was a draft penalty, like the other penalties in the measurements, and the NYYC chose that argument for thier protest.
My point was that the keel was a novelty and therefore not at all like overhangs in terms of the rule.
I think your initial point was that overhangs were sneaky so a wing keel was a similar loop hole eg:
Did you ever wonder why all the old racing yachts had those long, graceful overhangs? Not for looking pretty in the pictures. Talk to Captain Nat, he can explain..............................
Answer for 12m yachts: because since it's inception the rule virtually required them. They were well understood and the rule measured them in a manner that took sailing dynamics into account. There's no mystery here and no need to ask Cpn. Nat anything. Incidentally, aesthetics did play a role here.
Your next point seems to be that because sailing length is likely longer than LWL that a keel span that is longer than measured is a similar issued. Of course, the rule doesn't measure LWL as such. The length that the rule uses is quite close to the dynamic water line length. The rule has no correction for a keel span that increases with heel.
I'm not sure what your last point is. Maybe that because there have been other inventions in the class the keel shouldn't have gotten protested? That just seems silly so I must be missing your point.
At any rate, the justification for the keel's legality "because overhangs" seems weak to me. Just to be clear, I've got no problem at all with the keel measuring in. I don't think that overhangs had any relevance to the question.