Can you abbreviate the title of the Proceeedings of the IEEE?
The part you quote does not refer to the name of the Journal but to the vol. ##, no. ## section of the citation and is applicable to those earlier than 1988. 

So the 1981 citation would be 


IEEE Trans. Automat. Contr., vol. AC-26, no.1, pp. 1–34, Jan. 1981.


while a citation from the same journal past 1988 would be


IEEE Trans. Automat. Contr., vol. 40, no.1, pp. 1–34, Jan. 1995.


The exception to the Proc. of IEEE applies here, as it never had an abbreviation in the volume and it has always been:


Proc. IEEE, vol. 11, no. 3, pp. 1-11, Jan. 1978.


The example they provide is correct.