Thanks for the thoughtful post as always. Agree, the 1/2 self employment is an "adjustment" to AGI. I kept it out of the example because it would muddy up the charts.
Also agree on Section 179. Depending on the time of the year of the purchase, it might be feasible to forgo 179 so establish a small positive profit for the trade/business argument or avoid hobby loss limitation (although I may have to double-check how the test and limit mechanically works). Planning with a tax adviser is best because other non-crypto related tax return activity should be considered in overall decision-making.
Today, I see the biggest grey areas are electricity deductions (i.e. how it is blended through home office / hobby rules) and and classification of mined crypto as (a) capital asset or (b) ordinary income asset.
Disclaimer: This is not tax advice (see general disclaimer for authored post above).