It's not that it is stupid, straight-forward, insecure, or slow.

The problem I see is that this patent claims ownership of an infinite number of transformations that can be made to the Collatz function. There is nothing novel about this. They state that it is used as a hashing function, yet provide no property of the system that qualifies it to be a hashing function.

This belongs in a research paper, not in a patent.

Pretty much all patents are written in a way that can cover an infinite number of variations of the core idea. The novelty here may actually be the use of this as a cryptographic hash function. They give no supporting property, but as my other comment asks, if such a property cannot be easily divined, it may in fact be non-obvious.

Imagine patenting fractals, as in functions f(z) that can be iterated to make fractals!

It's an application, it hasn't been granted.

I totally agree! I learned about the conjecture in my late 20s and did some extensive work on the problem. The idea of using it as a hashing function is obvious (and equally obvious, it is a terribly inefficient one).