Interesting - thanks for providing the T&Cs, it is very hard to remember the breakfast and lounge benefits across brands (probably by design).

At Sheraton Palo Alto, breakfast was only offered as an elite welcome gift choice not as a replacement for not having a Club lounge. I feel like this is very different than under Starwood, where Sheratons were basically guaranted to have a Club Lounge. For example, at the Sheraton Palo Alto, 10 years ago they had a full lounge with breakfast, evening food, and free beer & wine (a real rarity in the US). So, they are clearly operating differently today than they did under Starwood.