Check the regulation I cited. Legal tax research order of importance starts with the statute (the Internal Revenue Code, Title 26 of the US Code), then the regulations, then court cases, and then non-binding IRS guidance of various sorts (publications, instructions, etc.). That regulation is binding authority.
There rules about how much and what type of authority is needed when a taxpayer or professional takes a tax position. The professional has a higher standard to meet. See, e.g. https://frostbrowntodd.com/a-taxpayers-consumer-guide-to-substantial-authority-tax-opinions/
If you take the depreciation deduction on the Schedule E for the property I don't see how you can't take it on the 1116. If you leave it off the Schedule E, then I think you have an argument. But your US basis upon sale is still reduced by depreciation taken or allowable, resulting in a larger US gain without the benefit of the deduction on Schedule E. I believe that is in I.R.C. 1016(a)(2) - https://www.law.cornell.edu/uscode/text/26/1016 ... perhaps a larger US gain upon sale won't matter because US capital gains tax rates are so low (sometimes 0%) and foreign rates are usually much higher. This might especially be true if the FTC wipes out any benefit of the US Sch E depreciation deduction.
I leave it to you to research whether or not one is required to take a deduction or not. Last time I reviewed that there was decent authority that a deduction that is "allowed" (typical statutory language) is not mandatory. But it's not certain, I think. However I feel (without being able to cite authority) that you would need to be consistent between schedule E and part I, 1116. Not sure how you could justify taking the deduction on Schedule E and not including it on Part I, 1116.
I do think you overestimate the number of people with foreign-rental properties. And the ability of the IRS to police this. There is no information form for that line to match against and very few people (relative to the 160 million tax returns filed a year) are in this position. I doubt they are expending resources to chase this down. That isn't relevant to your tax obligation, but may explain what is going on from a systems POV.
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