Niall, maybe I'm using the term "transition hole" differently than you. But your post calls out the thing that makes it a stroke of routing genius to me - I gotta think most architects would have gone straight from a green on the point (like 6) to a tee on the point (like the 8th). That's the obvious thing to do. By tucking one more so-tiny-it's-without-parallel-in-competitive-golf hole there, you get arguably the most iconic moment on one of the three most beloved courses in golf.
How can you maximize the whole better than that?
And while I get that 7 at Pebble isn't comparable with, like, 5 at Pine Valley, I think you're ignoring it for what it is. Pebble's routing offers mid-length and long par 3s elsewhere. You're about to play one of the hardest 3 hole stretches anywhere. And in front of you is a petite little wedge shot. There's a lot to be said for a hole that asks a good player to control ballflight with a lofted club from an elevated tee along a windy coastline. Meanwhile, my low-ball hitting mother took one of her best lifetime runs at an ace.
Seriously, if good golf architecture isn't a matter of challenging strong players while giving weaker players a fighting chance, and maximizing the natural attributes of a property to create indelible moments with variety of shot requirements distributed throughout, then what the hell is it?
In other words, can you explain how it would improve one of the greatest routings in golf to move 7 tee inland, into the blind landing area of 6, spoiling the delayed reveal of 10, 9, and finally 8, creating a walkback away from the sea and putting players on 8 tee into the line of fire for a hook, all so that you can create another mid length par 3 in a world full of them as opposed to one of golf's truly unique one shotters?