I'm pretty sure the Hendo Transition is not provided as part or the clearance, so nor is it read back by the crew. Working out that it needs to be selected is up to the crew. It is not always obvious, so yes, in a critical terrain environment such as this, it's a trap.
Yes this is the issue. The transition you read back is the STAR transition. You just have to know to put the approach transition and the STAR transition in the FMC and I don't believe it is uniform across the country.