Hmm, interesting. One could read it that Killing Hands turns Stun to Physical but that particular Elements turn it BACK to Stun. Icky.
But, if it's no longer physical, it's no longer killing strike! So killing strike converts it back to physical, elemental strike will then re-convert it back to stun. . . Oh god, the Shadowrun Infinite Loop!
That being said, while I see the problem with smoke / sound for ignoring armor, magic occupies a "special" place where Lightning bolt is the only thing in the core rules (SR4A only) where electricity suddenly is physical instead of stun damage. (see big long chat
here) So, I can see an intention of it being physical damage, it just gets real cheesy when you add in smoke / sound.
I think they meant it to be physical elemental damage in all cases, I just also think they didn't think about all the cases they had available.
I'd probably house-rule it.