I took a few music-centered copyright classes in college and thought I had a decent understanding of copyright. How in the world does this qualify for copyright claim? Is it that taking a photo/video of the physical device is making a derivative work? That too doesn't seem to make sense.

Or is this just another bogus claim, like the one UMG made against the Esoterica channel recently against their own recording and arrangement of a Debussy piece that's 150 years old?

It seems to me that there needs to be some sort of escrow that large copyright claimants need to put into when making these claims. If they make bogus claims, that should go to the person they accused incorrectly of a copyright violation. This would balance things out a bit, as currently last companies can just go claim anything they like, bully others, and have nothing behind it.