I think your interpretation is a little off, Basically (my interpretation) you can have undercut up to 1/16" for up to 2" of weld in any 12" of weld. If a weld has one single spot of undercut, up to 1/16" is allowed. you can have 32 spots of (up to) 1/16" undercut that is 1/16" long in 12" of weld, or a 2" long undercut that is up to 1/16" deep in 12" of weld.
There were many times when I was QA manager where the third party came in and hooked his fingernail and tried to reject undercut without using a v-wac gauge. My reply after I verified with my own V-wac gauge was that we would repair it, document and photograph before and after pictures and send his company the bill. (I always won that argument, even though I don't like undercut myself, but I was paid to help the company put out a product that met the specifications, and not waste money going overboard.) I have learned as a third party inspector that you can't reject something if it is not out of tolerance, or you may be picking a battle you can't win (and don't want to fight).
Hope my explanation was ok. (it was somewhat easy
)
Edit: BTW, welcome back Scott. wondered where you disappeared to. Sounds like your in a fabrication plant where you will be battling production trying to get a quality product. I did that, and done just fine by learning to let the minimum requirements go and even going to battle for the company when we were rejected by third party inspectors that did not have the proper gauges to do their job. (I always did, and always won those battles, that's why I was offered another 6K a year to stay. but I hated it actually and left anyway). Its a fine line you have to walk to keep everyone happy and get a quality product.