It sort of is going to them, but not entirely. The restaurant is called Jon and Vinney’s. I linked to an article somewhere else in this post about them. The restaurant has explained that they do it because the minimum wage in Los Angeles is $16.04. Basically, as a way to be dicks about it, they decided to add the surcharge to the bill to point out very specifically to their customers how much more they have to pay so they can afford to pay their staff $16.04 / hr.
In their minds, they probably feel like they are villifying the government of CA, but, as you’ve noted, most people just confuse it as “auto-gratuity” and then stiff the wait staff out of extra money they would have otherwise gotten.