Clarification: this question was intended to address the situation before FAR 91.225 went into effect; please answer accordingly. Feel free to also add additional content addressing the present situation now that FAR 91.225 has gone into effect.
Here are some of the airspaces where FAR 91.215 requires aircraft to have transponders--
(2) All aircraft. In all airspace within 30 nautical miles of an airport listed in appendix D, section 1 of this part from the surface upward to 10,000 feet MSL;
(3) Notwithstanding paragraph (b)(2) of this section, any aircraft which was not originally certificated with an engine-driven electrical system or which has not subsequently been certified with such a system installed, balloon or glider may conduct operations in the airspace within 30 nautical miles of an airport listed in appendix D, section 1 of this part provided such operations are conducted -
(i) Outside any Class A, Class B, or Class C airspace area; and
(ii) Below the altitude of the ceiling of a Class B or Class C airspace area designated for an airport or 10,000 feet MSL, whichever is lower;
Question 1: May an aircraft with no engine-driven electrical system and no transponder operate at 10,500' MSL in the airspace 10 miles west of South Valley Regional airport (U42) near Salt Lake City, where the overlying Class B shelf has a floor at 11,000', and a ceiling at 12,000' MSL? [(Link to sectional chart.)] 2
Note that KSLC is one of the airports listed in the Appendix referenced in FAR 91.215(b)(ii)-- this is a reference to the Mode C veil.
Question 2: May the same aircraft operate at 17,500' at the same location?
Question 3: (only applicable if the answers to (1) and (2) are both "yes")-- Does the "or below 10,000' MSL" clause of FAR 91.215(b)(3)(ii) have any actual practical significance of any kind? What is an example of some airspace where an aircraft with no engine-driven electrical system and no transponder may not operate, but would be able to operate if the "or below 10,000' MSL" clause were absent from FAR 91.215(b)(3)(ii)?
Note that FAR 91.215(b)(3) is simply an exemption to 91.215(b)(2), which appears to only apply up to 10,000' MSL, so it appears at first glance that the answers to the questions ought to be "yes", "yes", and "no". Is this really correct?
Question 4: What is the horizontal area affected by FAR 91.215(b)(3)(ii)? Is an aircraft without a transponder flying below 10,000' MSL supposed to stay below the altitude of the ceiling of any Class B or Class C airspace designated for an airport that happens to be within the 30-nm Mode C veil, even if the aircraft is horizontally distant from any portion of that airspace? If so, what if there is more than one than one such airport, and they have different ceilings?
Question 5: Does FAR 91.215(b)(3)(ii) have any practical significance of any kind at all? Would it ever affect where any aircraft may operate?