Engineer responded with something like "While third parties may support exporting from iCloud and previous versions may support it, current macOS versions doesn't support it by default. But it maybe supported in future.".
Based on how low level the error message is, I suspect that this feature was broken unintentionally and Apple is just too lazy to fix it. I interpret the engineer's statement as something to the effect of "Oops, we broke some really useful thing that some people used, and we are too lazy to fix it so I am just gonna say its not supported anymore, but give a cushion of 'we may support in the future' incase someone complains enough and we do decide to put it back in.".
Pretty annoyed tbh. It appears...
Due to Apples special encryption method used for iCloud keychains, it is nearly impossible for a third party to decrypt it, even with the password and due to whatever reason, Apple has stopped supported exporting to local keychain, which can be decrypted by third parties.
After looking more into it, the entire implementation seems to be open source. If anyone with the skill would like to take the time to figure out how to decrypt it, that'd be pretty cool. Here's the links: