Thanks for this in depth foray.
My knowledge of photography is informal so I had to read up on some of the definitions to supplement the understanding I have carried with me through the years.
The question I have, regarding your approach is this: since one of the categories of portraiture is 'candid portraiture', why can't some street photography be street portrait photography?
The candid approach to a portrait favours spontaneity and can indeed take place without the subject being aware of the photo. But even if they are aware, the encounter can still be a chance encounter, and the picture can be taken very naturally, without much preparation. It still is considered a portrait, because it captures something of the personality of the subject.
Example: I'm walking through a market in Italy and I notice an elderly woman selling tomatoes. The light is hitting her beautifully and she seems to quite naturally be emanating personality in the simple actions she is carrying out, perhaps because she has been doing them for years, and they are an integral part of who she is. This is felt through her spontaneous poses, and maybe could not be faked if you tried for it - so of course I sense the perfect moment for a portrait.
I have two choices: I can take photos from where I stand with a long lens, then ask her permission afterwards, to keep/use them. Or I can ask her if I can take her photo, and ask her to just keep doing what she is doing and pay no attention to me.
Both choices will result in a portrait photograph. Even if she is aware a picture is being taken, the setting and circumstances can still be those of a chance encounter and candid capturing of her essence.
The situation only ceases to be candid if I start asking her to do things she would not naturally be doing, or if she changes her behaviour because of the camera. Even there, there is some lee-way. What if the light dramatically improves the portrait when she is 1 foot to the left, and I ask her if she can just take that one step over, and then carry on with her natural activity. The resulting picture can still be considered candid if the feeling is still uncontrived. The woman knows I am going to take a picture, but if I wait a short while and allow her to slip back into her natural way of being, I may get an identical result to that which I would get if she was completely unaware of the picture being taken.
I think the bottom line is that portrait photography does not always require preparation or direction from the photographer. A candid portrait is a thing and that seems to open the door for this niche to make sense, and not be an oxymoron.
Because of this, I would be inclined to accept this niche.