I've always taken it to mean as nasib says...you can see Mode C, but you have no idea if Mode C (a notoriously error and failure prone bit of kit) is telling the truth.
You assume that a pilot looking at his altimeter (a) is telling the truth (b) has an accurate altimeter and (c) has set the sub-scale correctly, and is therefore in a position to verify the C readout.
You are probably right to trust the pilot above the Mode C capsule...but maybe not totally
W