I agree with you there, that the healthiness of different foods is complex and a binary category of "ultra processed" is not sufficient for understanding it.
In the case of potato chips though, I specifically disagree that they aren't ultra processed - look into the process for creating soybean or canola oil and try to explain how that isn't "ultra processed".
further thinking along these lines:
Consider a boiled potato. That would generally be considered healthy.
Now add butter to it. Those who think saturated fat is unhealthy would say it's unhealthy, I'd say it's healthy - though sure, fat generally has more calories per micronutrients so you also need to get your micronutrients somewhere, like by eating lots of greens too. And with caveat that butter from conventional cows can have issues like the hormones or medications but I haven't dug deep into that. And there are people who have sensitivity to dairy, etc. But for a normal healthy person, adding lard, or butter, or real unrefined coconut oil, or real unrefined olive oil to one's potato while increasing the calories doesn't itself make it junk food or unhealthy.
Frying it could be an issue, proportional probably to the amount and intensity of frying, though I'd argue much more so in cases where the frying oil is reused, as reused frying oil is going to be much more oxidized and thus cause more oxidative stress / free radicals in the body which are understood to be a big cause of metabolic / mitochondrial damage which lead to diseases like diabetes.
And there's one of the nuances - different fats are more or less easy to oxidize. Specifically, saturated fats are the hardest to oxidize, omega 3s are a little easier to oxidize, and omega 6 (polyunsaturated fats / PUFAs) are much easier to oxidize. You can verify this by looking into the chemistry a bit. That's one of the key mechanisms of action as I understand it.
Still, deep frying in tallow that has been reused for a week is still going to be really bad because tallow does still oxidize, just much less readily than PUFAs.
Refined PUFAs are heated several times during the processing, which causes oxidation. Not to mention antioxidants are removed by the process, and also the PUFAs themselves are more prone to oxidize in the first place.
So to recap:
1. boiled potato = fine
2. boiled potato with added butter = more calories per micronutrient, but still real food and no particularly bad thing in it
3. potato pan fried in [butter, lard, tallow, coconut oil] = more oxidative stress than above, but still probably not terrible considering pan frying food is very normal.
4. potato deep fried in [butter, lard, tallow, coconut oil] that has been used repeatedly = significantly more oxidative stress, would not recommend, maybe I'd call it junk food
5. potato deep fried in [soybean oil, canola oil, etc] = significantly more oxidative stress again than #4
This does not yet get into the other potential issues with refined oils:
- hexane residue (people eat average of 25 to 250mg per year of hexane in the US in refined oils) - may not matter at all but still something weird about the food.
- other chemical residues from the other processes