I think I agree with everything written here. The notes seem to imply that it isn't allowed (the sentence about only legal rules being allowed besides the listed exceptions), but the notes could just be referring to the "Revised" ruleset. But at the end of the day its up to whomever is playing what the "rules" are anyways.
At this point we have decided (in the NWO game I am playing) to only allow "legal" moves in the engine and thus LHTR rules only apply for non-combat and placement. This just makes things "easier" (don't have to consider moves that the engine doesn't allow) and also better preserves the balance of the map as the differences between LHTR and Revised is not as large without this extra rule.
@beelee I am in agreement. The current TripleA AI is pretty good, although it has some fixable glitches. I think the further improvements should come from the ability to create specific heuristics for the AI for specific nations and scenarios.
What isn't going to happen is the creation of neural net style AI that will play well. A&A is beyond the capability of current AI approaches to solve.