I like this account, except that therefore Locutus was completely and utterly misdirected.
Not the same as confused.
Why is that bad? Locutus was misdirected and I think that's cool. If it had been Picard, he probably would have figured it out via intuition/gut feeling. Locutus doesn't have that. Therefore he fails.
This isn't quite true. Picard was still alive inside Locutus, experiencing everything that happened, and the Borg were aware of everything that Picard was thinking. If Picard was able to figure it out, then the Borg would have known instantly.