Yes, obviously. But it's not on "them" (plutes) to not do it. Well, not in absolute sense. You can ask people that have an advantage to not use it ... but unless it's clearly illegal, there's nothing much from stopping some of them.
And the next issue (beyond plutes asking) is politicians delivering it, which is a more hands-on issue.
"But there’s a subtler, technical reason this is bullshit."
- this I don't agree with, though. When you say the language of the Tax Code is broad, you mean it's ambiguous. And the "latitude" it gives the IRS is utter nonsense, exactly for the reason you give below. It's pointless to allow and enforcer to define what it goes after if that ambiguity is used to hog the process.
And this has nothing to do with loopholes. It's a basic principle of the law that an ambiguous rule will be interpreted to favour the party that wasn't involved in its creation, which basically means that if you face a government agency in court, you need a lawyer that's not a total shithead and is able to see terms that are undefined. If it's undefined, call out "ambiguity!" and reframe the term and as long as there's no prevailing damage beyond IRS saying "but that's unfair" there will be enough reason for the IRS to lose.
What I'm saying is that a broad mandate is useless. More specific rules and mandates (aka: close the loopholes!) are needed. The first to profit will be tax lawyers, of course.
The ESD is great as an idea, but sports team are a great way to dodge it. I have not heard of it successfully used to take down laundering through sports teams because the broad language makes it hard to make a case that transactions are running afoul of it, even when it's plain and obvious.