There's a slightly outdated article in TTA that sheds some light on things:

https://www.thetaxadviser.com/issues/2019/jul/kiddie-tax-unearned-income-scholarships.html

I didn't dig into regs but a look at the code section 1 (where kiddie tax is hiding) specifically references the definition of "earned income" that's used in section 911 (foreign earned income exclusion).

In contrast, section 63(c)(5) just throws out an undefined term "earned income", leaving it up to the courts to decide. I can make an argument that clearly Congress has the power to use the definition written in IRC 911 since they chose to use that language by reference in IRC 1. So clearly they did not intend for that definition to apply when writing IRC 63. 😉 In fact, in regards to earned income, IRC 911(d) specifically states "for purposes of this section". For purposes of other sections, who knows?

In the back of my mind (behind the cobwebs) there are concepts of "worked for" scholarships (earned) and "didn't work for" scholarships (unearned). This seems to be in line with the "quid pro quo" concept mentioned in the TTA article in the section relating to athletic scholarships. Are we supposed to rely on the University to understand the difference between earned and unearned and issue a W-2 for all earned scholarships? Remember, these are the same people who still can't seem to get a 1098-T filled out correctly.