I'm not a lawyer, but that doesn't sound right to me.
Consider four people who graduated at the same age, then took different paths:
* Experienced Eric worked for the same company for 11 years, is still there, and is considering a new job.
* Younger Yenina worked for the same company for 10 years, is still there, and is considering a new job.
* Late Larry searched for a job for 1 year, worked for the same company for 10 years, is still there, and is considering a new job.
* Unemployed Ursula worked for the same company for 10 years, got laid off, and has been looking for 1 year.
The law you quoted appears to say it's illegal to discriminate against Unemployed Ursula for being currently unemployed, so she should have the same shot as Younger Yenina and Late Larry. It doesn't say her year of unemployment must be considered equal to Experience Eric's extra year of work.
(There are also age discrimination laws that say you can't prefer Younger Yenina simply for being younger, gender discrimination laws that say you can't prefer Late Larry simply for being male, etc.)
The argument made prior to this is not that an unemployed person is equal to a continuously employed worker but merely that unemployment should not and cannot affect your qualifications for position X. The law is pretty general as it states an employed person is anyone who does not have a job, is able to work, and is seeking work.
If Eric, Yenina, Ursula, and Larry are all able bodies, placing Ursula in her own category based solely on a gap year is in itself discriminatory.
The parent comments are taking the gap year into account—something that can be elaborated on, but should never be a deciding factor. The general consensus ITT is that Eric automatically is a better fit for position X than Ursula based solely on their employment history.
That argument in itself shows biases toward length of employment and current status, with the latter being something that should be irrelevant in a hiring process.
Edit: to show an example, most job postings on P&G have this disclosure:
>Qualified individuals will not be disadvantaged based on being unemployed.
That one line is what everybody is arguing againat, that unemployment automatically declines your qualifications.
Isn't it? Maybe that's not what you meant to say, but even now as I re-read your earlier comment I think that's what you said. Based on the downvotes and jimjansen's reply, I'm not alone. jimjansen's reply in fact seems to have taken you to mean that you simply cannot consider someone's experience at all, which is a totally unreasonable position and consistent with your wording. I tried to be more generous in my interpretation but simply can't interpret your earlier comment in way that's consistent with the (correct) idea that one can legally hire Experienced Eric rather than Unemployed Ursula because of his additional experience.
(By the way, unfortunately I think these discrimination laws are basically toothless because in real life there are many factors that legally can be considered, they're all subjective, and employers are under no obligation to explain their reasoning. So you can almost never prove discrimination unless they are dumb enough to tell you about it.)