The ATP can give instruction (without a CFI) only within the scope of 121 (or 135) operations. So a 121 sim instructor or LCA does not need a CFI if he is a current captain on that equipment (he does not have to be on the seniority list, that's irrelevant).

I think the language also allows him to teach other airline pilots being trained at a 142 outfit, if he completes the airline's training program.

But he cannot teach primary students in a 172 at the local patch on his days off...he needs a CFI for that, an ATP is a not a carte blanche substitute for the CFI. He also cannot teach a non-airline pilot.

But to actually get hired at a 142 outfit would most likely require a CFI or previous 121 sim instructor experience.