How does the two room penalty work in Grand Austria Hotel?
I think the intention here is you must do whats worst for you.

If you have two rooms on the same highest level and one has an occupied room beneath it the you must choose the one where you can lose both.  You would only get a choice if the conditions was met more than once.

Below means 'aligned and below'.   Look at the picture you posted.  The rooms crossed out are in the same aligned column whilst the ones not below are not crossed out.