Here's the commentary language - "This requirement effectively compounds the requirements for someone planning to alter an existing structure. For example, if during the process of replacing the aluminum siding on a building with vinyl siding, the building owner decides to eliminate one of four windows from a room, then this project would be classified as a Level 2 alteration and would, therefore, be required to meet the provisions of Chap 6 and 7"
that's how i read the first (bolded) phrase.
here i've changed the example, but the code effect would stay the same.
"This requirement effectively compounds the requirements for someone planning to alter an existing structure. For example, if during the process of replacing horsehair plaster with blueboard, the building owner decides to remove one wall within a room, then this project would be classified as a Level 2 alteration and would, therefore, be required to meet the provisions of Chap 6 and 7"
redoing the wall covering would be Level 1 work - changing a system. The removal of a wall would be Level 2. ICC compounds the work into Level 2.