Does a CFI need an Instrument Rating https://www.ecfr.gov/cgi-bin/retrieveECFR?gp&amp;n=14y2.0.1.1.2&amp;r=PART#se14.2.61_1183

The or below is very confusing.  Doesn't it mean I need an Instrument rating or one of the things that follows it in the list?  Or means one or the other, not both.
Furthermore, when would one of the things that follows in the list NOT apply?

(2) An instrument rating, or privileges on that person's pilot certificate that are appropriate to the flight instructor rating sought, if applying for—

(i) A flight instructor certificate with an airplane category and single-engine class rating;

(ii) A flight instructor certificate with an airplane category and multiengine class rating;

(iii) A flight instructor certificate with a powered-lift rating; or

(iv) A flight instructor certificate with an instrument rating.
For most people, the answer is yes—you need an instrument rating to be a CFI or CFII for the categories that are listed. 

It is possible to become an ATP by using military experience. In that specific case a person has instrument privileges but may not have an instrument rating.