Treat it as...
Otherwise functions as...
X is now Y...
Your torch is now a light weapon, not improvised.
Feats, Traits, and abilities targeting improvised weapons no longer apply to your torch.
You can have an Adamantine +5 light mace torch, OR use it as an improvised weapon... not both.
All the nonsense Style feats that allow improvised weapons to behave as larger size will not work if you take the feat to make a torch a light weapon.
Torch Fighter does actually change the weapon. What it does is allow you to treat the torch as light weapon and to ignore the penalty for using it as an improvised weapon. Since you treat it as a light weapon you can use any ability or feat that can be used with a light weapon when using it this way. That means if you have weapon finesse or piranha strike you can use those with a torch.
Surprise weapon gives you a +2 bonus to hit while using an improvised weapon, but does not cancel the -4 penalty to hit. So what it really does is to reduce the penalty to -2 when using an improvised weapon.
So far everything is fairly straight forward. When you have both the feat and the trait it gets a little more complicated. Looking at the last line of the benefit section of torch fighter it is pretty specific that you are not using the torch as an improvised weapon. That would mean that the benefits of the feat and trait do not stack. To get the +2 bonus to hit from surprise weapon you need to be using it like an improvised weapon which means taking the -4 penalty.
That is a mythic feat not a normal feat. The mythic rules are a optional subset of the rules that are designed to do things that are normally against the rules. Mythic feats are also not stand alone feats they are extensions of the normal feat and add additional abilities to the standard feat. You still gain all the abilities of the standard feat.
The quoted line,
"Treats a torch as a simple weapon instead of improvised weapon"
seems different from the torch fighter feat description. I see instead, "You treat a torch as a light weapon that deals bludgeoning damage equal to that of a light mace of its size plus 1 point of fire damage, and you do not incur penalties as you would for using it as an improvised weapon."
I don't see anything indicating that the "improvised weapon" portion of using the torch is being overwritten by the feat. There would be no need to call out that you no longer take improvised weapon penalties if the weapon were no longer an improvised weapon. I think the feat changes the weapon from one handed to light, and the die size from 1d4 to 1d6 and otherwise leaves it unchanged.
A spell like refine improvised weapon would prevent it from being an improvised weapon as the weapon is said to work as a specific weapon after the casting.
You can't have an improvised weapon enchanted as a weapon. If you wanted a torch that worked as a master work weapon and could be enchanted as such, you'd actually have a masterwork club that could be lit on fire. A masterwork torch would be a masterwork tool and wouldn't satisfy the requirements for being enchanted as a weapon.
The trick to getting around the inability to enchant improvised weapons is the Gloves of Improvised Might They are expensive, but hey you get to wield a +5 torch and you can pick up a chairleg and it's +5 too.