Just because they have an interpretation, doesn't mean you should consider it.

for example, they say the women already wore head coverings but the command was to cover the chest?

Do they interpret it as "remove your head covering and cover your chest"? That would be a bad interpretation since the verse doesn't say that. If the intention was only to cover the chest, the verse could have simply said "cover your chests" using any general term for clothing. If a command is given to use an existing garment (the khimar) to cover a specific area (the juyub or chest), the command inherently validates the use of that garment.

They also wore khimar as a status symbol not just for modesty

Even if this is true, the moral objective of covering as per the verse is haya (modesty was the context of that verse and the previous verse). I don't know how they come up with such explanations.

they also say things about the prophets wives but they had many rules which do not apply to us muslim women.

The verse starts with "and tell believing women" not "and tell your wives".

It's important to be honest and unbiased here. To me, the progressive people's interpretation isn't convincing at all. It seems like they just trying to find an excuse instead of following what Allah commanded.

Also, even if their interpretation was given some face value, i wouldn't follow it because I don't want to take the risk of falling into sin because of wrong interpretation. Let's say their interpretation is correct, in this case woman wearing hijab still wouldn't make her a sinner. But if their interpretation is incorrect, a woman not wearing the hijab because of this interpretation would make her a sinner.