it says that the privileges cannot be exercised.
Mike, I know you are bored of this topic
But I think that if a person was ramp checked, they held an FAA 61.75 certificate AND US medical but no EASA medical.....then you'd be fine.
If one crashed into a school and killed a load of children and the US lawyers got involved, then I think they might argue that although the holder had a US medical, that they were not valid because the "privileges" of the EASA licence were nil due to the missing EASA medical and therefore you had no right to fly ("All limitations on the foreign license apply").
Remember, all this 61.75 stuff is written for any ICAO licence, not just EASA. It might be that some other ICAO state doesn't put any restriction anywhere but could for example just state "you must have a medical every two years which conforms to an ICAO medical").
I think this is something that can only be proved one way or the other in a court case, and I for one would not like to try it out. At least if one holds an EASA medical, and a BFR then one is 100% legit and there are no technicalities that a lawyer could use to fleece you.