I don't like the engineering of the clamped foot pegs either
Rickman, Cheney, Cotton, Trackmaster, Hindall and Can-Am (
thanks C-A 370)amongst others have used an identical system for decades with no known problems. I think it's an even better system to a welded peg bracket in that the stress is spread over a larger area inboard of the frame rail.
I also agree with the pipe location but remember that this frame/bike was probably built in the early seventies when fashion dictated different ergonomics. Back then it was probably thought to be ideal.