Yes, batteries are more efficient than power-to-hydrogen-to-power. But the "cost of inefficiency" is proportional to the number of charge-discharge cycles of the storage system over its economic lifespan. For diurnal storage, you'd be correct, hydrogen is a poor choice. But diurnal storage is only one storage use case. For other storage use cases, such as seasonal storage, or backup against rare prolonged outages of renewable sources, there are relatively few charge/discharge cycles. For those uses, hydrogen is vastly superior to batteries.
The argument that hydrogen would imply use of fossil fuels is nonsense. Fossil fuels are going to have to be kept in the ground in general by punishing legal sanction. What makes production of hydrogen somehow immune to that?