AFAICT the wording is clear and you are reading it correctly. But I'm curious what the GM thinks it does prevent, if not those things. Does he think it's the same as mind blank, preventing only divination spells?
Point out that if it was that they would just say "this gives you mind blank."
As per RAW, yes, Undetectable blocks all forms of detection when procced by invisibility.
Undetectable: This grants its bonded user the ability to become utterly undetectable while invisible. While invisible and in physical contact with this item, the bonded creature can’t be detected or scryed by any method.
Pretty clear that it blocks any and all forms of detection while the item is in contact with an invisible bonded user.
That being said, this ability is absurdly overpowered.
Talk to your GM about it. As per RAW, you're correct, it trumps quite literally "any method" of detection or scrying.
While not a formal FAQ ruling, there was a developer post on this very subject.
I will note that I ended up banning it and foe-biting 3/4s of the way through Wrath of the Righteous because they were simply too powerful. All of my group supported the decision.
The homebrewed response I ended up using for a mythic campaign I've been GMing is to allow Undetectable to trump any and all methods of detection, but not with guaranteed success.
All I did was change it as follows.
Homebrewed Undetectable: While invisible and in physical contact with this item, the bonded creature can’t be scryed by any method. The bonded creature may also attempt stealth checks against special senses such as blindsense, tremorsense, scent, and other abilities that normally preclude such an action. This check is made at no penalty.
IE: The bonded character can't be scryed while invisible, and may still attempt stealth against creatures with special senses or other forms of special detection. The invisibility with Undetectable just "turns off" the special sense for lack of a better phrase.
No I don't also give the player a +20 bonus for being invisible on the stealth roll, that's for non-special senses that Undetectable doesn't affect.
Undetectable is beyond broken and banned in both the games I run and the games I play in.
Undetectable is worded as an absolute. By RAW, nothing beats it. Not true seeing, not tremor sense, not the gods.
I've got a question, should not this ability be better than Mindblank? Some of these suggestions make Mindblank the better option.
I've got 2 characters in my Wrath of the Righteous campaign who've picked up that ability on legendary items. I've ruled that it blocks all attempts to detect invisibility that would normally be used to penetrate/foil invisibility itself - meaning spells like see invisible, glitter dust, and including true sight. I do not prevent other methods of detection like scent, sound, and tremorsense without the spending of a mythic point.
Otherwise, the power for the item is pretty ridiculous.
Overall, this is the one and only mythic campaign I'll run.
A house rule to make the ability useful but not LOL overpowered might base it on the newish spell Impenetrable Veil. Gives a bonus to Stealth (your tier?), can always attempt a Stealth check, even when observed, and can use Stealth to beat special senses like Blindsight. Divination spells must make a caster check against a DC of your Stealth check.
It's a 9th level spell with an expensive component, so not too off the mark for a mythic ability.