That second is just an extension of the first.

Yeah, but not a necessary extension for happiness. That's an important difference.

The linchpin criticism is that neither is the solution people are actually looking for in the labor market today. The worsening working conditions leading to less compensation, personal autonomy, peer recognition ("relatedness"), etc. are driven by an oversupply of labor even for specialized knowledge economy jobs (ask science PhDs)

Within reasonable limits, if you specialize you become more valuable. That some markets are oversaturated is unavoidable, but even within science PhDs there is probably opportunity to become better at what they do. I highly doubt it's a homogenous group of people. On the other hand, in the argument tree I linked in the opening post, he talks about a third of the way down about when the craftsman approach fails: if there are few opportunities to distinguish yourself. Some positions are just too obscure or specific to be filled by a driven individual.

For example, in my country, individuals who went to highly ranked laws schools did not get the professional results they wanted, because the market for the law profession collapsed faster than they could even complete their education.

I think you're Dutch too, judging by your name and this example. If that's true, you know as well as I do that most of the students go to law school because they think it will land them a nice job or because they don't know what to study, not so much because they aspire to be great at their work. They don't fulfill all the requirements laid out by the author for intrinsic motivation: autonomy, mastery and purpose.

Besides that, you make the mistake of judging the outcome by judging the method. If the way you approach challenges and problems is good, but it fails because of external factors (other people), can you really blame the individual when their methodology is fine? If I have a 90% chance of getting a good job that I like from studying somewhere, but I happen to fall in the 10% that don't because of factors that I didn't foresee, does that mean I made the wrong decision? In case of the law students: they know very well that far too many people study law school and it doesn't stop them, because if you put enough useful effort in and are intrinsically motivated they can and will rise above the mean.