4) External Warning Horn/Warning Light
C 1 0 May be inoperative for ground operation provided flight deck APU Overheat/Fire Protection Panel is continuously monitored.
So there are circumstances where the APU FDS is required. ..... And if it was item #4 it's a no-go for flight.
I know nothing about the 737. And I agree on first reading it sounds like the external horn and light are required in flight. However, on both the 727 and 747 the external warning system is deactivated by the air/ground sensor.