It is well worth the upgrade vs the SP3 keyboard. And yes the fingerprint recognition is VERY fast. You don't swipe, you just lightly place your finger on the sensor and it doesn't matter what direction your finger is on it but it recognizes it. It was a little confusing when setting up the finger print because it needs to read your print about 5 times but once you get through that it is nice.
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I hear your frustration but Microsoft didn't say its compatible with SP3 AND Windows 8, the only thing Microsoft said is it is compatible with SP3 which it is. You are indeed splitting hairs my friend.
If it is any consolation I have a SurfacePro1 running Windows 10 and the new keyboard functions fine with it but not the fingerprint scanner even though I watched it download the necessary fingerprint drivers.
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Just curious, how does Windows10 downgrade OneNote and the tablet experience on the SP3. I am using the same OneNote desktop program and I am not aware that if limited it.