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It's moving him from P to DH and switching a pitcher in to the pitchers spot that seems like a loophole. Unless DH is considered a "position on the field", the rules don't seem to cover that particular switch. Or is that considered pinch hitting of it's done when they're not up to bat?...
Nevermind... the phrase "who has not previously appeared in the game" was omitted from the version I was reading for some reason. I rechecked and found what you're meaning. Essentially when it comes to the DH the spot is lost for the game in any change other than a PH or PR replacing the DH. You could move a SP there and immediately eliminate DH for the rest of the game though.