Re: splicing
I disagree with your statement. You are correct that the AHJ is the person responsible for interpreting the rules. An interpretation, however, is not an option for this. 250.70 spells it out quite clearly...there is no interpretation to be made. As Don said, your inspector is wrong.
An interpretation would be something like defining the term "subject to physical damage" or "likely to become energized". Again, 90.4 does not create an all powerful being, it creates the inspection department.