Having personally been through the employee vs contractor maelstrom when, for some unknown reason, the state government got a bug up it's ass, I'd have to say that the state requirements become quite arbitrary.
What you might think is appropriate is sort of besides the point.
I too have been through the maelstrom. What I think is appropriate for me as it all boils down to interpreting the IRS regs and hiring a good lawyer who successfully avoids and navigates lawsuits for me. Just because I navigated it successfully doesn’t mean I’m right or my interpretation is appropriate for all.
But I think it’s pretty useful and certainly disproves that it’s not possible to hire software contractors.
What you might think is appropriate is sort of besides the point.