...only SOME directories are restored and others are installed fresh from the "installation image".
What installation image? You only start with the TM backup and a blank drive - if this is NOT a true restore from backup please say what other process you think is???
There is a "restore from TM backup" process (which is referred to here).
There is a "migrate using TM data" process (which I think you and your friends are referring to) and which obviously requires an OS to already be installed.
They are different.