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Interestingly, this would align the US with most European countries.

In most countries, a child born in that country acquires the parent's immigration status, be it citizen, permanent resident or illegal.

The headline is a bit misleading, the proposed Executive Order would end birthright citizenship for children of any non-citizen. This includes people who are in the US without documentation, but also includes people in the US legally who have children.
The remainder of the headline is ",setting up a constitutional battle."

It's not much of a battle. Someone will sue and this will almost instantly be overturned in federal court. The Trump administration knows this.

The question is, does Trump know this? :)
That's fair, but I imagine he does. It costs him nothing personally to sign such an executive order and it sends a signal to the anti-immigrant voters that he shares their beliefs and is fighting for them.
Hmm, that "and" clause makes this interesting: All persons born or naturalized in the United States, and subject to the jurisdiction thereof..." -- so you are a citizen if you are born here and subject to the law. So if you opt out of being subject to the law you don't get to be a citizen but you can't be arrested for burglary and the like?