The section of CAP 804 you quote is only a CAA interpretation and was probably written for the more common circumstance where people get CPL first, then the IR some time later. However (i) CAP 804 itself is now withdrawn, recognising that many rules (and interpretations) have changed since April 2015 and (ii) FCL025 says clearly that ATR's exams are valid for ATPL issue and it would be bizzare if FCL035 was found not to apply for CPL issue without an explicit exclusion. Given the clear difference of interpretations, though, the simplest thing for ATR700 to do would be to email the CAA and ask them.
See
CAA website