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Y'all are reading into that too much. We have a similar clause in Texas, which is virtually our only protection in regards to breaks. To simplify: they are saying that if the employee is eating AND working, then you have to pay them. I'm not sure how they are wording it in Kentucky but here it's along the lines of "you don't have to give the peasants a break, but if you do and it is unpaid then it is illegal to request that they work".
It sounds stupid because they are literally saying "if you don't pay them they can't be forced to work", but I'm really glad that protection is there or guarantee it would be abused even more than it likely already is.
The practical effect is everyone just gets an unpaid lunch because asking people to work 8 hours with no break is ridiculous.