You misunderstand. Obviously, taken in context, that CFR section refers to someone who has tested for an upper level (Unlimited) license at the management level, in other words, someone who has tested for Chief Mate Unlimited.
Using your mistaken reading of the CFR, and your twisted bayou "logic", anyone with any license as a Master would be entitled to upgrade to Master unlimited without exam. For example: Master 500 tons is a "management" level license. People that hold Master 500 are required to take the management GAP closing course Leadership & Management because they are "management." Thus, according to you, any Master 500 would be entitled to upgrade to Master Unlimited without exam. Clearly, that is not what the CFR you cite intends or requires. The tiniest bit of common sense tells us that your interpretation of that CFR would be contrary to the entire USCG licensing structure and purpose.
Of course most of us know that the bayou boat companies bought enough Congressmen (with campaign contributions), and bought enough USCG officers (with the promise of future jobs) to get the USCG to put an Unlimited Master give-away, After an exam, into the CFRs for large mudboat drivers. As absurd, corrupt, and dishonest as this is, it is very unfortunately how the US Government operates.