One subtle aspect of their interpretation that I did not catch the first time I read it:
The statement "pilot's report of flight conditions does not supercede AWOS" applies to CFR 91.157. That paragraph basically says no, ATC cannot give you an SVFR clearance based on you saying that the AWOS is wrong. Interestingly, it looks like they have since amended 91.157 to make this explicit:
(d) The determination of visibility by a pilot in accordance with paragraph (c)(2) of this section is not an official weather report or an official ground visibility report.
That is not the same as saying the pilot's observation does not supercede AWOS for CFR 91.155, and leaves that possibility open.