I think the confusion for this question is that we should have clarified if we were looking for the sensory, motor, or neurological level of injury. The correct answer for this one is referring to the motor level of injury – defined by the lowest key muscle function that has a grade of at least 3 (on supine testing).
If we were looking for the neurological level your definition would be correct.
Sorry for the confusion! We will be sure to make a change to clarify that we are looking for the motor level for this one.