It would be safe to assume a business with 30 employees would bring nearly 30 cars into the street and a coffee shop could increase foot traffic.
These things aren't necessarily true, but those assumptions aren't necessarily unreasonable. I think this is where things break down.
Out my way, when zoning does allow home-based business, restrictions are mainly about yard/accessory building usage, customer traffic/parking, and number of non-resident employees(I assume because of parking).
I see it as an honest attempt to prevent nuisance activity while allowing some flexibility but it also seems lazy and too restrictive. My hypothetical garage based machine shop could be non-conforming and be one complaint away from being shut down no matter how unobtrusive it is.