Hmmm. It would be interesting to get some input from a fed. Given that the AIM is advisory, and 4-1-20 begins with a statement along the lines of "refer to 91.215 for a more specific description of these general guidelines," I'm not entirely convinced. While the wording in the reg is vague, to me a correct parsing of the sentence would imply below as well as above. Plus, there's the obvious commonsense fact that an approach controller would flip his lid if you were wandering around 6 or 7 miles out at 1000' AGL with no Mode C. As far as the AIM goes, well it wouldn't be the first time the FAA has published a handbook or manual that's downright wrong... When they rewrote the Instrument Flying Handbook 2-3 years back, it was a disaster.