I agree this interpretation leaves some ugly gaps, but it's RAW. Maybe it's easier to just go with the popular inkblot interpretation, but keep in mind you would be adding things so the spell makes sense. By the way, have you read the 3.5 version? It kinda works as
@FrogReaver is proposing:
This spell causes an object to radiate shadowy illumination out to a 20-foot radius. All creatures in the area gain
concealment (20% miss chance). Even creatures that can normally see in such conditions (such as with
darkvision or
low-light vision) have the miss chance in an area shrouded in magical darkness.
Normal lights (torches, candles, lanterns, and so forth) are incapable of brightening the area, as are light spells of lower level. Higher level light spells are not affected by darkness.
If darkness is cast on a small object that is then placed inside or under a lightproof covering, the spell’s effect is blocked until the covering is removed.
Darkness counters or dispels any light spell of equal or lower spell level.
Arcane Material Component
A bit of bat fur and either a drop of pitch or a piece of coal.