Ok, I am officially stumped. I almost believe your theory that there was some sort of deception on the part of William during the 1940 census. However, like you, I have no idea why he would do that.
I have spent several hours attempting to track all the names involved, any and every way I can imagine. The odd thing is I cannot find any record of Elizabeth, Dich K, Mary Helen, WJ Junior, or Milton B as a family with any last name prior to the 1940 census. Following the 1940 Census none of these people surface again in any fashion.
The other odd thing is Ruby, Christina, and Roger seem to have totally vanished in 1940 census. I cannot find them anywhere.
It does appear that Elizabeth, Dich K, Mary Helen, WJ Junior, and Milton B, may have been fabricated, but why?