Full Wings - judging by the raft of opinion here I offer the thought that the wording is 'strange' enough?
Re the 1250', as Cough says, "would *you" expect to be still struggling for 1250' 7nm from g/a?
"would *you* level off at 1250' and head into the hills if you were doing this for real...?"- from your interpretation, yes, you would have at least 'wait' for 1250' (not 'level off'/'heading into the hills') regardless of position! Looking at the charts there is actually nothing to 'bother' you at 1250' well out, past 12nm.