The Sins of Season 1:
Much of this season suffered from the decisions made in the previous season. Sometimes it strove to correct those mistakes, occasionally veering into overcorrection territory (Galadriel literally becoming a damsel in distress as a glaring example). But having to try and salvage the inconsistent plot points and logic of the previous season often painted them into corners that resulted in dumb characters and absurd plot contrivances. The relationship between Celebrimbor and Sauron/Annatar was unquestionably the highlight of this season, but in the process it just highlighted how terrible the decision in season 1 to omit Annatar in favor of "Halbrand" was (and the showrunner's terrible explanations for it), and season 2 had to arrange a host of ridiculous plot contrivances to explain how Celebrimbor would be fooled again by Halbrand/Annatar and the Elves would use the rings (despite them being forged out of order and with Galadriel's knowledge of Sauron's involvement). There are countless other examples all around of the show trying to dig itself out of the hole season 1 created. The Numenoreans colonies are suddenly a thing again, despite season 1 making a huge deal of them sailing to Middle Earth. Entire character plotlines were jammed in because they didn't know what to do with Adar, Theo, Isildur, or Arondir after season 1. Honestly, they probably should have just Bronwyn'd a few more of them off screen.
Good review of yours overall, but you really nailed it here. This is similar to how I felt going into Rise of Skywalker after all the holes The Last Jedi left it in. And this mostly goes back to the biggest mistake of season 1: making Halbrand Sauron, which basically wrecked it for me. I liked seeing Annatar in season 2, but I agree that it made Halbrand a waste. I don't think they intended to have Halbrand become Annatar in season 2, but with terrible a fit Halbrand is as Sauron, it seems like this was a last minute retcon, because IMO the way Halbrand was written in season 1 appeared he was suppose to replace Annatar entirely. If they did intend on having Annatar at the time they started filming, I don't think Halbrand ever exists. It's along the lines of the Star Wars Sequel trilogy, where I don't think they intended to bring back Palpatine, but when Snoke was killed off in The Last Jedi, that lowered the stakes too much (Kylo Renn wouldn't be able to carry the story as much as the primary antagonist), so in a desperation move they brought back Palpatine for the role Snoke was likely to play in that film. Classic examples in film and TV series of how mistakes can put successor films/seasons in a hole, which could them compound.
What I find most inexcusable of this season on it's own is that the one ring hasn't been forged. And if the siege of Eregion was the whole of the War of the Elves and Sauron, they did a pretty piss poor job at it. In the Tolkien timeline, I know Rivendell is founded during the war. However, the ring was already forged by then, and Sauron didn't go back to Mordor until he had to retreat. In the show, he still has to go back to Mordor to forge the ring at Mt. Doom, so the Fall of Eregion might be all we see of this war.
Edit: I also agree that they didn't know what to do with certain characters this season. Adar had outlived his usefulness to the story in Season 2. The season should've began with Sauron returning to Mordor as Halbrand both killing Adar and taking control of the orcs right there. The 3 way war they tried having his character in for this season was useless.