Juliet, I beg to differ, perceived common sense does not take over here.
That line in LIMITATIONS is very clear and reads exactly what is printed. Minimum height for autopilot use with CAT 1 displayed is 160 ft. Meaning, that if your FMA displays CAT 1 the autopilot is only certified to 160 feet.
With CAT 2 or better displayed there is no technical limitation for autopilot disengagement, as indeed the aircraft is autoland and rollout capable.
Noted though, there is a paragraph "Autoland in CAT 1 conditions" or similar. I would agree with what you suggest completely, but not within the scope of OP's question.
take care, FD.