No, you are right! Just refreshed my experience, by noting that the maximum discount is less cost-effective than the lower rate.
Of course, the individual's choice will be driven by their relative cash sensitivity and Avios holding. The £400 discount may matter a lot to some, but £280 off is indeed a better exchange rate. The clue is in the £400 and £200 discounts ... 76k v 31k Avios!