That is how some countries interpret the regulation, but what the regulation actualy says is:
FCL.1000 Examiner certificates
(a) General. Holders of an examiner certificate shall:
(1) hold an equivalent licence, rating or certificate to the ones for which they are authorised
to conduct skill tests, proficiency checks or assessments of competence and the privilege to
instruct for them;
(2) be qualified to act as PIC on the aircraft during a skill test, proficiency check or assessment
of competence when conducted on the aircraft.
The TRE holds an equivalent rating and is entitled to act as PIC so may conduct the test. He is not conducting an ATPL Skill test and therefore does not need to hold an ATPL. Sadly, the halfwits in some NAAs don't seem to understand this.