This is totally unsurprising to me in today's political climate. Thanks Grace for enlightening us, that is very helpful info.
All of you parents out there with dual US/UK children: Be forewarned. As a lawyer I can tell you, you don't want your children to be in someone's constitutional law textbooks one day, "The Supreme Court took a significantly more restrictive view of citizenship by descent in the case of Meggles Sister's son v. Rice, where..."
Note also that using a foreign passport to enter the US could one day be taken as an indication of intent to relinquish US citizenship. Under current law/practice, it is probably not sufficient, but the statute itself hasn't been changed since the days when dual citizenship was not permitted. It's only the interpretation (and that could change again, even if it is unlikely to do so!).