This is exactly what i was searching an answer for.
As your rightly pointed out, CA says to apply a reasonable appropriation and word "a reasonable way" as something that's obviously beneficial to them. Every CPA i have talked to, takes CA's reasonable way allocation as the default allocation. But i have doubt this can stand a challenge b/c equity options by definition has a time element associated with it by virtue of the incremental vesting.
A better more appropriate allocation seems to be accounting from the "vesting" date of an option. Meaning if you an option vested while in CA its attributable entirely to CA state, if it vests in another state its attributable to that state. My suspicion is this tracking of options becomes a bit difficult and it also complicates if you happen to jump around a bunch of states in and out during your employment.
I have, however, failed to see a court case against this. My suspicion is CA FTB maybe sends a letter, but maybe settles without trying to take it to the court. All in all, they hope their "reasonable" assumption becomes the default to the common masses
