After checking MS Bar Ilan 2851 and the fairly-recent critical edition of the book (ספר ברית המנוחה: מהדורה מדעית ומבואות, by Oded Porat), it seems that this section did appear pretty much as-is in the best manuscripts of the book we have today.
Shadal in his book וכוח על חכמת הקבלה (Debate on Kabbalah), the record of a debate between him and a guest on the legitimacy of Kabbalah, recounted (p. 26):
"And I rose and took the book, and the man followed me to see [two unclear words], and I took Sefer Brit Menuchah and read before him the introduction, as so:
"And Ezra and his court passed it to Shma'ayah and Avtalyon etc, and Shma'ayah and Avtalyon passed it to Hillel and Shammai, and this Hillel was Na'aryah of the descendants of David, from the royal lineage, which is found in Chronicles etc [...]"
And the man laughed and said: "How many bundles of faults were said in these two lines, which were [supposedly] written in Ruach Hakodesh! [...] First, he (=the author) lied when stating that Ezra passed on to Shma'ayah and Avtalayon, who were at least 300 years after him, and were this the case, Rebbi wouldn't have avoided mentioning him in the chapter 'Moshe received Torah from Sinai' (Avot 1) [...]"
The author: Did you forget that which we find in the Talmud, that R' Dosa ben Horkinas who lived in the generation of the destruction testified that "upon this mortar sat the Prophet Chaggai"?"
In other words, according to Shadal, there are other recorded cases of later sages bringing teachings in the name of people who lived centuries prior, so in some cases, it seems that there were some sages who lived for centuries. It's possible that this explains also the rationale behind the chronology of the rest of the tradition.
Regarding Chachmei Yehudah, the printed edition which you are using has "מלכי יהודה וחכמיהם" - the kings of Yehudah and their sages. I imagine there are variants to this phrase in other manuscripts, but I can't check them at the moment (see n. 1 below). Based on the printed edition, I would guess that this refers to the same unnamed sages within the courts of the various kings, such as "אנשי חזקיה מלך יהודה" (Mishlei 25:1), also called "חזקיהו וסיעתו" (Bava Batra 15a), or "יהושפט ובית דינו" mentioned by some commentators.
Two things should be noted:
- What Porat regards "the best manuscripts" were copied at least a century after the book was created, perhaps even more (the dating of the book is debated).
- There are some similarities between the introduction of Brit Menuchah and an anonymous introduction to 'Sefer Ha'Ne'elam'2 added to one manuscript of that book. Porat thought that both introductions based themselves on an older source.
Therefore, there's no telling how this particular paragraph came evolved and what the original version of the tradition looked like (although the Sefer Ha'Ne'elam's version makes more sense...).
1 Finding manuscripts of the book is a bit difficult now because the NLI website will be down for the next couple of days while the library is working on its transfer to its new building.
2 Sefer Ha'Ne'elam is a Kabbalistic book mentioned in Rabbi Moshe de Leon's Or Zarua book. An anonymous medieval Kabbalistic compilation which appears in Bibliothèque nationale de France (BN) MS Héb 817 (which I could not access at the moment but could hopefully be accessed via the NLI website when it goes back online) has been identified by some as either the same book or a book based on that book that shares the same title (I still haven't figured out whether the title appears in the manuscript itself). For more information, see here, pp. 224-239.
