After reading the document again I agree with you. In fact, example 16 at the back is the most relevant and there's no mis-interpretation that discount is applied after offseting the loss.
Short term gains for a trader are income rather than in the capital account... so there's usually not a lot of short term capital gains to offset the loss.
That's a bit of a pain then - balancing up the losses against non-discountable gains is the legit minimisation route. Any scope for segregating business and private to generate some non-discountable gains on a capital account? Perhaps too messy to be worth it.