I don't know the full story about the Aston Martin Cygnet, but let me hypothesize... To me, it looks like the idea of a management consulting group. Probably a McKinsey or Gallup or Bain. Aston Martin probably said that to the consulting team that here are our objectives; sell more cars, get huge profits per car, gain a new type of customer, gain female customers, and gain younger customers. McKinsey's Consultants probably put this in their great "Great Automatic Grammatizator" (it's a Roald Dahl short story) and the machine probably spat out this solution. The McKinsey team probably pitched this with their full hearts and the board and/or management team was probably swayed and eventually green lit the project.
Now, Max Busser knows his customers pretty well. He always wanted to create a lower end brand, one that was more mass market. He even had a name for it, which he scrapped, and then chose M.A.D. as the name. He also knew that the M.A.D. watches had to be very different than the MB&F products, a clear separation. Knowing Max since 2007/8/9 (can't claim to know him extremely well, but I've known him over a long period of time) he's always been a fairly consistent fella; and I think he's one of the few who has the correct overall vision, has the creativity, has the charm that makes me like HIM very much, AND the business acumen to keep it all afloat. I'd say he definitely worked hard to keep the two brands very separate. I also find that MB&F is only known by watch people, people whom would know the difference.
Nevertheless, despite all of the above, I can see where you're coming from. Although personally, I'm not too worried, as I don't think anyone with a M.A.D. watch can successfully fool anyone that they're wearing an MB&F product.
You're actually the first person to really bring it up, as I never really thought of it - as I saw the gap between M.A.D. watches and MB&F watches to be substantial. But, after reading your post, I realized you're right, there will be a segment of the population who will just look at it as a Max Busser creation and attribute it to MB&F. It's probably a small segment, but still... So all I can say is, you're not wrong. And I thought of the Aston Martin Cygnet tiny car when you mentioned Aston Martin. And as someone who just bought the Omega Moonwatch, I thought it'd be threatened by the MoonSwatch. After seeing the MoonSwatch in person - I realized there was no threat nor confusion. Have you seen the M.A.D. watches? I guess to someone who doesn't really know movement quality, they'd see M.A.D. watch as a high quality product and it's really not bad at all. But seeing and handling an MB&F is just a whole different level. There's just something special about the MB&F that just isn't there with the M.A.D. watch. The weight, the way it feels, the corners on the MB&F just feel so smooth, and the corners on the M.A.D. feel a little more industrial. Toyota makes really small tiny cars, and they also make a very expensive grand Lexus car or if you live in Japan, the Toyota Century - the Japanese Rolls Royce equivalent. That's even more confusing since they all are branded Toyota. Although the Century has a phoenix logo instead of the typical circular Toyota logo.
I'm pretty sure that this is not a brand misstep. But then again, I'm just one opinion, and your opinion is very valid here. You bring up a valid argument. But personally, I don't think there's anything to worry about. Those who know MB&F, definitely know the M.A.D. isn't anywhere close.