I think you are misreading the worksheet. The worksheet is ONLY taxing the capital gains and dividends.
However, you are correct that it could effectively be a very high tax rate. While the Roth conversion would be taxed at your regular tax rate, that 'extra' income could cause your capital gains/dividends to go from the 0% tax bracket up to the 15% tax bracket. That means the direct tax on the Roth conversion PLUS pushing your other income from 0% to 15% could effectively result in a very high tax outcome.
