Intruder:
However, such substitution is NOT allowed on the final approach segment, per par. 8.b of that AC...
You are missing a critical word in Paragraph 8.b, and I quote:
"8 b. Substitution on a Final Approach Segment. Substitution for the NAVAID (for example, a VOR or NDB) providing
lateral guidance for the final approach segment."
That prohibits substitution of the localizer, not the DME.