It sounds like we may be getting into the practical/realistic application of FOM guidance vs. the intent of the author.
Based just what I see in the excerpt I posted, the required response to an unstable call (which would occur when "timely corrections" are not made) is a go-around. There doesn't appear to be room for interpretation. If there is, then I think that needs to be spelled out. I remember in S/O new hire training when they told me a possible response to my "unstable" call might be "continue" from the Captain. Maybe that option has been removed over the various FOM revisions.
The airspeed situation you encountered might fall under the "timely correction" caveat, at least in the eyes of the LCA you dealt with. I don't think any Captain has the option to call for the gear and respond "continue" to an "unstable, gear" call at 500' considering there's no way the 21 second gear extension time on the MD-11 can be considered a timely correction.