It IS possible to use DL miles and book an intra-Europe flight on non-DL metal. I have done it several times and it still shows me availability on routes I am considering now (like CPH-SVQ or PRG-CPH).

But an award ticket is not always available, it sometimes sends you on a more complicated route (2 transfers instead of one… as it uses AF metal instead of SAS metal, for example), it also costs more than using miles in the US (taxes are much higher in Europe, so in the end it might not be worth using the miles as opposed to paying for the ticket). And yes, it is not possible to use the AMEX 15% mile discount.

Still, sometimes using miles intra-Europe is a viable option: when I recently flew on SAS CPH-PRG, I used my miles because it was better than paying the very high cash price. I also earned much more MQDs by spending miles than paying cash, and I could use those MQDs towards my status for the next year.