Apologies for the long post that largely agrees with what you had to say :p To give some background to the uniniated, the theory of 'Social Facism' as described gives a historical perspective into so-called 'red-brown unity' leading up until WW2.

(anti communist parties described Stalinists as fascist) [...] led to mutual hostility between social democrats and communists, which were additionally intensified in 1929 when Berlin's police, then under control of the SPD (socdem) government, shot down communist workers demonstrating on May Day in what became called Blutmai (Bloody May). That and the repressive legislation against the communists that followed served as further evidence to communists that social democrats were indeed "social fascists".

The idea of social fascism, that social democrats are "objectively the moderate wing of fascism" as Stalin put it, intensified by SocDem authoritarian anti-left policies, lead to even greater hostility from the Communists against the Liberals than the Nazi's themselves at the time.

In 1929, the KPD's paramilitary organisation, the Roter Frontkämpferbund ("Alliance of Red Front-Fighters"), was banned as extremist by the governing social democrats. A KPD resolution described the "social fascists" [social democrats] as the "main pillar of the dictatorship of Capital". In 1930, Kurt Schumacher of the SPD accused Communists of being "red-lacquered doppelgangers of the Nazis". In Prussia, the largest state of Germany, the KPD united with the Nazis in unsuccessful attempt to bring down the state government of SPD by means of a Landtag referendum.

So technically, there was a red-brown (Communist-Nazi) alliance within Prussia in order to take down the SocDems, the Comms were obviously more ideologically aligned with socdems but felt they were the main thing preventing progress and thus wanted to speed up their demise.

We all know how collaborating with the Nazi's turned out:

After Adolf Hitler's Nazi Party came to power in Germany, the KPD was outlawed and thousands of its members were arrested, including Thälmann. Those events made the Comintern do a complete turn on the question of alliance with social democrats and the theory of social fascism was abandoned. At the Seventh Congress of the Comintern in 1935, Georgi Dimitrov outlined the new policy of the popular front in his address "For the Unity of the Working Class Against Fascism". This popular front [...] The American historian Theodore Draper argued that "the so-called theory of social fascism and the practice based on it constituted one of the chief factors contributing to the victory of German fascism in January 1933".

It turns out that by the communists temporarily aligning against liberals with the fascists in what today would probably be known as 'accelerationism', we headed from social democracy to concentration camps in 10 years.

And as you say, fascism is typically more obvious:

Leon Trotsky argued against the accusations of "social fascism". In the March 1932 Bulletin of the Opposition, he declared: "Should fascism come to power, it will ride over your skulls and spines like a terrific tank. [...] And only a fighting unity with the Social Democratic workers can bring victory". 

And while there are elements of logic to such a conclusion of 'social fascism' especially when today you have every 'social democrat' or 'liberal' capitaluting heavily rightwards and forming alliances with the far-right (France etc.) BUT As you say, and as history has shown, muddying the waters about the true nature of fascism pulls wool over the eyes of those with potential to affect change and prevent the rise true fascism. Which is growing every day.

Karl Popper argued that some radical parties of the era welcomed or turned a blind eye to the weakening of democracy, or saw a dictatorship as a temporary stepping stone to a revolution. quote from Popper "[Communists] even hoped that a totalitarian dictatorship in Central Europe would speed up matters [...] Accordingly, the Communists did not fight when the fascists seized power. (Nobody expected the Social Democrats to fight). For the Communists were sure that the proletarian revolution was overdue and that the fascist interlude, necessary for its speeding up, could not last longer than a few months."

And finally, it reeks of the unfortunate leftist 'purity test' behaviour which weakens unity and divides potential allies.

In 1969, the ex-communist historian Theodore Draper argued that the Communists who proposed the theory of social fascism, "were chiefly concerned with drawing a line of blood between themselves and all others to the 'right' of them, including the most 'left-wing' of the Social-Democrats."

Anyway, when I read this theory it opened my eyes a tonne to the folly of refusing to collaborate with liberals. While I still believe liberal and center right policy, along with intense anti-left propaganda, are the reason for the rise of fascism today (overton window, ratcheting effect, disillusionment with electoral politics due to ineffective and oppressive governance that only benefits the wealthy).

Despite this by ostracising and refusing to collaborate with liberals we shoot ourselves in the foot by being so obsessed with purity that we reject reality. Perfect is the enemy of good. All progress is good provided it takes us along the right path and does not cut off the path to something greater.