Circular clearly says this is only when the bank earns interchange fees. So it is not applicable on zero MDR transactions, so not applicable on CC-over-UPI txns below Rs. 2000.
This also probably means that in the future, banks are going to complain about zero MDR for low value txns, and RuPay will introduce MDR for lower value txns too. But then, merchants could start refusing CC-over-UPI. It's going to be interesting.