It's not flawed, look in the help for it:
"Unlike the EmbeddedObjects property in NotesRichTextItem, this property does not include file attachments, nor OLE/1 objects created in Notes Release 3."
It is a drag that HasEmbedded returns True for file attachments, and then EmbeddedObjects is empty, but that's the way it is documented, and that's the way it works.
I like your solution Mr. Zeller, but I sure which there was some way to do it without the file system, something more like this one - hilarious little spat on that one, so that's the one I will link to whenever it comes up, no matter how many others are out there ;-)
A way to take a document attachment that you get from the web, and jam it into a rich text field, without using the file system, would get many many kudos from me at least.
Or even better, have domino create a MyFieldName rich text field for you when you have an <input type="file" name="MyFieldName"> on your web page, and put the attachment in there. Sigh.
What is that document attachment thing, a hold over from like Notes 3 or something? I'd like to see it (and us!) put out of its misery already!