Farsight, are you defending something you believe represents some reality? . . . Or is this just an argument based on a narrow subjective conceptual interpretation, of a theoretical discussion that occurred almost 100 years ago?
It's the second sentence. "This means that a clock kept at this place would go at the rate zero".
Quoting a single sentence does not give a clear understanding of what Einstein might have been arguing. I have not studied the whole of the paper in any detail, at least not recently, however, consider the intent of your quote above when interpreted in context with the following... All quoted from the same paper.
If one first considers the beginning of the first sentence, the one just before the sentence you quote,
If one considers Schwarzschild's solution of the static gravitational field of spherical symmetry...
Then the first sentence of the second paragraph,
There arises the question whether it is possible to build up a field containing such singularities with the help of actual gravitating masses, or whether such regions with vanishing g_44 do not exist in cases which have physical reality.
And then this, the first sentence of the second to last paragraph in the paper, which seems to act as a conclusion,
The essential result of this investigation is a clear understanding as to why the "Schwarzschild singularities" do not exist in physical reality
Since it appears that Einstein's intent was an argument that "Schwarzschild singularities" do not exist in reality, the conclusion that a clock . . , and time stops at an event horizon, based on the geometry of "Schwarzschild singularities" would not represent any conclusive interpretation of reality.
For anyone interested a PDF copy of the paper is available at,
http://www.cscamm.umd.edu/tiglio/GR2012/Syllabus_files/EinsteinSchwarzschild.pdf
As I have mentioned earlier, GR tells us nothing of substance (meaning reality) about what happens at or inside an event horizon, beyond the fact that we detect no light escaping. Until we have some better understanding and/or functional model of quantum gravity, that can explain gravity under the conditions that would exist, the reality we can draw from kinetic descriptions of gravity provided by GR, as a matter of reality, must and are limited to those kinetic interactions we can observe and which conform to predictions. These at present do not even approach any event horizon. The best we can do is describe how gravitationally significant masses, orbit a black hole far outside of its event horizon. Again as a completely theoretical debate go for it. Just don't confuse the theoretical debate with reality.
There are similar issues with some of your apparent conclusions that follow, but really . . , they are not worth discussion as presented here. At least not until you move the discussion to some conceptual frame of reference that might be assumed to exist as reality.