I have seen this before. Management wants to be agile and be scrummified, but does not want to step out of the status quo. My latest observation is no different; here, the Scrum is 'tailored' to the organization; specifically into a weird many-people-process.
The diagram showing the different participants.
I am putting together a document listing why this will not work. Here are the obvious ones:
1. There are product owner agents (an obvious WTF), who report to the product owner: causing dilution of decision making capability
2. There is a role that looks similar to a manager in the traditional approach - development manager: an obvious attempt at command-and-control model
3. The ScrumMaster's role includes collecting timesheets, which are used to track progress instead of burndown charts: detrimental to agile's efforts to build teams with motivated individuals
Leaving the question "how would you convince the management?", my question is more at, "what else do you see as failures in this/similar 'tailored Scrum approaches'?
EDIT: The diagram might use a few more details
1. The development manager is not part of the development team, with not very clearly defined responsibilities, except: developer performance assessemnt, recruitment, etc.,
2. There are more than two teams (with ScrumMaster+development manager+dev team) with the same product owner for all teams!