The question is an excellent one, and the answer is a simple one, and I think Crab got it wrong, and vfrpb got it right, IMHO.
If you are in fog, with 1000m visibility, you are not in cloud, you are in fog. The regulation is specifically written so that obscurations to visibility are not clouds.
The regulation requires that you remain "clear of cloud" so that you are steering around masses of zero vis cloud while remaining visual enough to stay right-side up, and under full control. You slow down enough to keep from hitting things, and you land if it is too bad. Think of the last time you went into cloud, what was the vis in the cloud? 1000 Meters? I doubt it, it was as close to zero as it gets, and that is a cloud, and that is what the reg means.
Of course, if you are flying around at low altitude, with 1/2 mile vis and clouds all around you, you have to ask "Why?" If you have 123 hours and are in a Robbie, you should be shot. In a US Army Black Hawk, you are at tactical VFR mins, and perhaps on your way to the landing zone, locked and loaded, and it is just a tough day at work.