At the start of a pdf on allies there is the following statement:
"Unless specified in the notes, the general must be the same type as the army commander in their own army's list but cannot be legendary.
Usually this results in 1-3 UGs being compulsory and you having full flexibility on the rest."
Just this mean you cannot bring a legendary cinc if bringing internal allies? Because you can only have talented at best.
The bit you quote is not from the section on internal allies. Therefore, it does not affect your AC if you are using an internal ally.
I had always read that as referring to whether or not the army commander from the allied list was instinctive or professional, not to to quality level like legendary or talented, am I incorrect? For example if I took a roman ally in an army, they would have to be professional, as the roman AC is professional, but aside from not being legendary, could be any other rating.
You are correct.