This is incorrect, from a linguistic perspective, but it's absolutely the case that if I asked 10 of my friends to describe Ä, 9 of them would say "'A' with an umlaut".
The vernacular not matching expert terms of art never ceases to annoy people, but it's not really worth fighting, I don't think.
Absolutely.
Yet it's hardly a secret either and something you would expect someone who graduated university writing for a relatively well known newspaper to be able to get right. It's trivial to most readers of English whether they got it right, sure. It's also trivial to get it right and they did not. It looks bad and casts bad light on the newspaper for accuracy and getting details correct. Needless to say there are plenty of details that may not be as trivial to get right but are non-trivial in their effect of your understanding of the story. How does something as batshit simple as this winding up smeared on the WSJ's face in such a nothing story affect the readers' estimate of how often they get important details wrong? That assessment is up to each reader but I'm pretty sure we can all agree it probably doesn't help much.