why the heck did the chief insist on Ron being the protective detail?

It seemed poor script, even if they tried to adress the issue in the movie. We can also add that :

1. The chief was smart enough to send a black a cop to a black panther conference but not enough to send a white cop to a white conference;
2. I doubt the KKK would have accepted a black cops as a "protection";
3. I even doubt the KKK would have accepted any protection at all;
4. When the chief gives Ron the protection mission the racist cop presence wasn't justified and he certainly had no say;

yep that was dumb,
seemed like a really forced plot device just to let ron have some facetime with the kkk head guy

That actually happened. The ceremony wasn’t as elaborate as portrayed in the movie though. But Stallworth did serve as David Duke’s bodyguard while he was visiting. This is about how he met Duke from HistoryvsHollywood:

Yes, but the encounter wasn't part of Stallworth's undercover work. The BlacKkKlansman true story supports what's seen in the movie. Stallworth's chief assigned him to protect David Duke during Duke's January 10, 1979 visit to Colorado Springs. "That's fine," said Duke after Stallworth introduced himself. "I appreciate the police department's efforts. Thank you." Stallworth joined Duke and his fellow Klan members at a local steakhouse for lunch. Unlike the movie, it was a regular restaurant and Duke's visit wasn't part of any ceremony. Stallworth's partner on the undercover case, portrayed by Adam Driver in the movie, was posing as the "white" Stallworth at the time and was present at the lunch. During the meal, Stallworth, who had brought a Polaroid camera, asked Duke for a favor.

"Mr. Duke, no one will ever believe me if I tell them I was your bodyguard. Would you mind taking a picture with me?" Duke agreed and Stallworth's partner, who was working undercover, took the picture. Stallworth, who stood between Duke and another Klansman, the Grand Dragon of Colorado, placed his arms around their shoulders at the last minute, just before his partner snapped the picture. Duke lunged for the picture but Stallworth was "a split second faster" and got to the photo first. Duke reached toward Stallworth but Stallworth warned him, "If you touch me, I’ll arrest you for assault on a police officer. That’s worth about five years in prison. DON’T DO IT!" Duke, furious, stepped back. Unfortunately, the photo has since been lost. -NYPost.com

What made it weirder was that there was that other guy (the older guy) who it seems could have stepped in instead. Was he busy that day?

Other people here are saying that really happened, though. Maybe they just tried to make it a dramatic scene?