What actually happened here is that the AFDS captured the low leveloff very early (evidence FMA VNAV ALT). The AFDS sub-mode (not displayed on modern Boeings or Airbusses) is V/S. In this sub-mode the AFDS tries to follow a parabolic arc to level off at the captured altitude using pitch control. The A/THR has speed but is respecting only the low speed limit. VFE is ignored in this submode.
As suggested, the best way (but not the only way) to handle a low level off with automation is revert to FLCH. This puts the A/THR back in charge of the speed, not guarding it.
I too have been given the low level off at DEL. I rejected it and sat on the runway until I was given a more reasonable level off.
Like PJ2 I wonder about the SMS at AI.
