This means once the alien comes back on AP, he is in parolee status. However the guidance allows him to extend H-1B prior to the termination of parolee status. My understanding is once AP expires, the alien will be stuck in AOS status and hence lose the H-1B status.
Second, the memo also provides that even if the employee re-enters on an AP and continues his H-1B employment he will not be considered to engage in unauthorized employment.
This shows that CIS may only allow the alien to work for the same H-1B employer without requiring an EAD. But it does not mean the employee can work in a H-1B status. To have that status back, the employee has to either extend the H-1B or has the new employer to apply for a new H-1B.
The concept is little twisted: you can work like an H-1B but without an H-1B status. That's the basic gist of the memo.