From a very knowledgeable friend. Great to bottom it out!
Begin with 38 √ W/S (NU).
Then calculate 0.9 Vh actually obtained at sea level (Actually, it appears that " Vh actually obtained at sea level" would be a flight test value, the "calculation" relates to multiplying the (Test) Vh by 0.9.
If the 0.9 Vh is less than 38 √ W/S (NU), then (and only then) use 0.9 Vh.
While it is not applicable, you may find a clearer wording in early versions of Part 23. You might also review AC23-8, "Flight Test Guide for Part 23 Airplanes". The beauty of an AC is it will often give guidance on how to determine the correct answer. There would also be more stuff in the NPRM associated with that specific rule - easy if you know where to click on the FAA website/Regulatory and Guidance Library; there is often a link at the bottom of each section, where the background to each Amendment is discussed.
Hope this helps. If further discussion is needed, let me know...but we're probably heading into territory that involves a lot of references, like weight growth/wing area increase/power increase as the PA-28 evolved. Superficially, it is unlikely that cruise speed would be greater than 0.9 Vh, so why bother meeting a more stringent requirement - the 38 √ W/S (NU) would appear to be an empirical value that corresponds to a typical Cl max for airfoils of the CAR 3 era, along with the assumption of a "typical" sharp edged gust. Later codes include a gust alleviation factor, as the science developed.