I found this sentence in an edition of The Guardian, September 21,1988
“The basic
framework is there: the Treaty of Rome itself was intended as a charter for
economic liberty,” she said. "But that is not how it has always been read, still less applied."
The sentence in italics is the one that interests me, so it seems possible to me you can also say
That’s not how the Treaty has always been read, much less applied.
That’s not how they’ve always read the treaty, much less applied it.
I think the sentence in intalics as well as my first sentence have been passivised, whereas my second sentence is active. But they do make sense to me. Please have a look at my last sentence
He scarcely bothered to look at them, much less speak to them.
We cannot afford a new BMW, much less a Rolls Royce.
I must admit your English is great and so are your questions. I agree with the assumptions you make in this post of yours and look forward to hearing what @Alan, @Anglophile and@Andrea have to say. Thank you very much for sharing this with us.
Your question is related to reading the treaty and applying the treaty.
While the Treaty of Rome is not read as a charter for economic liberty as intended, it is not applied in full either.
So, to me, the import is: The treaty is neither read seriously nor applied completely.
Your first two sentences (in passive and in active) do more justice to the sentence in question than what you understand from your last two sentences in which the phrase much less is used in a different sense (You may afford a BMW but not a Rolls Royce at any rate).