I think you are reading part of it correctly. What I noticed is that this policy statement does not say these are the only exceptions to the policy. I'm certain that this is all intentional and done to cloud the issue. I do see several other problems with it:
1. I'd bet the University would argue that since Mitchell had one, the Mitchell decision only pertains to people with a CCDWL. Not true, but that will be their response.
2. In Section I of the policy, KRS 237.115 gives no authority to "prohibit" anything. 237.115 only states that 237.110 does not change what ever authority universities had to "control" weapons before 237.110 was passed. (Might be a good idea for the University to consult their own English Dept. for the difference in the definitions of "control" and "prohibit". Notice how this section shifts gears from "control" to "prohibit" with no problem or explanation.)
3. In section IV of the policy, KRS 237.110 (17) says public employers can't prohibit CCDW licensees from carrying in vehicles owned by that employer. (The courts have never ruled on this situation and I think it could go either way. University property can be used like private property, but vehicles and employer/employee relations may or may not follow that ruling and the Mitchell case did not specifically address either of them.)
4. So, it appears an "on duty" LEO is prohibited from possessing a gun if he swings by the University to pick up his wife, child or girlfriend. Same for a retired LEO carrying under LEOSA or even an off duty UofL Police officer who goes to a UofL football game after his shift. I'd wager all of these people would be surprised to learn this.
This policy is a slight improvement over the previous one, but its still flawed. We need to get rid of this, but that may take a lot of work for a small benefit. It took a Supreme Court decision to get this small change.