Yash Roongta I don't think the popularity of some things makes something legal(case in point all the scams before the regulators actually looked into it, eg Sahara scam, 1992 scam). Let me explain to you the pipeline, Sebi puts the responsibility of algo trading and individual algo approvals in the hands of the exchange, and once approved by exchange then the brokers can facilitate it "Officially".
Now the brokers simply expose their api's for clients in hopes of more order flow and for enabling use with third party trading terminals(as nothing in Sebi guidelines say they cannot open api's as long as they have rate limits and other protections), so in their mind, they have not violated any guidelines(which in a sense is true).
"I do not want to base my facts behind what forums are saying and take the Upstox T&C example; automated trading is not permitted without any manual intervention; speaking to a couple of people in the industry, this manual intervention is meant to be logging in" -> The definition of ALGO/Auto trading by Sebi is 'Any order that is generated using automated execution logic shall be known as algorithmic trading.', now this speaks about each ORDER, which is generated based on some logic. The Uptsox folks wanting to comply with guidelines have put the line in their terms " APIs are not meant for fully automating trades, and if you wish to do fully automated trading, seak approvals from exchange", so in every reasonable interpretation of the guidelines, each order needs manual intervention, else why the need for approval from the exchange.
I am not sure who you are consulting with & if they any vested interest/bias in providing distorted and misrepresented, reasoning to simple and clear statements. I think you should reach out directly to the actual compliance teams or some top-level execs of top brokers(not the shady ones), and they will probably give more clarity. I also have heard people in the industry say it is a grey area, but that is far from the truth, as the wordings and the principal expectation by sebi cannot be any clear, that SEBI wants exchanges to approve each algo, only then a broker should be allowing these algo's to fire automated orders, which is not being done at all, hence clear non-compliance.
"Given how famous these platforms are in the Algo-Trading domain in India, it feels unreal how they can operate without their broker objecting if they are really violating guidelines." -> None of the platforms providing auto trading are truly integrated(via a business agreement,etc), which is why they rely on clients to put their api's keys manually. What is happening here is the broker now has the plausible deniability of the situation of how their api's are used by the clients, when questioned by the exchange and sebi, and are not liable to the client for anything data breaches/etc via api as their terms made it clear, and they(brokers) get the upside of the order flow, which is why they are okay and looking the other side.
Except of a few mentioned above, rest are in complete violation of SEBI guidelines, and you not putting a disclaimer mentioning that, which is quite irresponsible. Eg: tradetron is allowing people to sell strategies and autotrade, both of which violation of SEBI guidelines under various circulars. Another example would be kuants or anyone offering paid market place or autotrade situation. Also most of these ask clients to put their broker API keys which are meant for personal use in a commercial service, which is violation of brokers terms of service and exposes clients to huge security risks. Please be more responsible in your writing, especially when novice don't know the guidelines and although you have done a ton of research, you have not gone done enough. Only few you have listed truly follow the the compliance and have actually partnered with brokers to provide their service, rather than just adding support via public APIs meant of personal use only.