You can do whatever the rules say you can do, and you can't do whatever the rules say you can't do. It may be in volition of the principle of the rule, but unless the NCAA has specifically prohibited something (or included it in a definition of an acting qualifier) then it's legal. Which is why I think Michigan is operating in a perceived grey area. You can agree or not and that's where it will stay until the NCAA rules on it. The NCAA bans institutional staff members from scouting games in person. If there's a definition that defines someone as such because they're asked to perform a task for a staff member, then so be it. but that will be where this case is defined.
I think you, and many, are operating on a false premise that the NCAA rules are clearer than they actually are relating specifically to this case. We both agree if a coach went to a game and scouted, this would be case closed.