This is what I hate about the FAR's, they don't write it in plain English. It's all in legalese. My thinking is the "or" with the statement about turbopropeller-powered small aircraft being certificated under .169 does not apply to reciprocating aircraft. So you disregard that tid-bit. I do think that the rest of the paragraph applies to the reciprocating aircraft.
I know other colleagues and I have had other discussions about how to properly interpret the FAR's because of confusing wording.