Can Lua config files be downloaded and executed in an iOS app?
This is fine. Apple doesn't approve of apps which download executable Objective-C. Other languages seem to be fine, including but not limited to JavaScript. A configuration file, regardless of the language, is perfectly within the guidelines.

The specific wording of the guideline indicates that content (used figuratively to mean data, executables, scripts, etc) that is provided by the app developer, modifying the functionality of the app further than is already built in to the app at review time, is prohibited. This is to prevent apps changing completely once they've been reviewed and accepted. Your app which runs Lua scripts presumably can run Lua built in, rather than executing the scripts externally and receiving the result. This means that all the functionality is within the app, thus acceptable.