Barnstorming on an Invisible Segway

That is how I would read it, yes. And while I freely acknowledge that breaking the chain there is arbitrary, it at least functions like a well-constructed alternate history: you pick your one point of deviation, and extrapolate from there. No machines that run on electricity. Check. But you can still have gaslights and steam engines and gunpowder, without the unspoken assumption that there are light bulbs and telephones and so on just around the corner. I very much prefer that to individually deciding which technologies should be permitted into the setting and which shouldn't, on no particular principle other than "what does the author think is cool?" That's what I think of as "above the waterline" arbitrariness.