It is Act 1. If this was the end of the game, and we didn't have an answer, I'd totally agree with you.

However, what we do know is that there is powerful Sharran/ Netherese Shadow Magic involved which is keeping it from transforming you by normal means.

This is no different than Bhaalspawn. With the Bhaalspawn, you were infused by the powerful seed of a god. Here, you are infused with the powerful seed of a mind flayer that is special and godlike. Just as the Bhaalspawn was slowly transforming into the Slayer, so we are being transformed into some sort of special weapon that the Absolute and others want to use.

It is honestly not much different at all. The only difference is that they haven't fully explained what the differences are between the special tadpole we have and the tadpoles of other True Souls. But it's only Act 1. They didn't explain why we were having those strange visions in BG1 until later in the story also. We just started having all sorts of weird murder/death visions and dreams. Nothing made sense until later.

Give Larian a break on this. I agree there are other discrepencies that don't make sense in the game, but this major plot point, I don't think, is one of them.