The two work in tandem, it just means that you can’t have two co-owners both being nominated in respect of the same lot, because they would be doubling up.
So a co-owner can either be nominated by the other co-owner who is not standing for the EC, or by another owner. But they can’t self-nominate.
Refer 17(1)(b) of the 2010 Regulation which refers to nomination of candidates who are eligible for election. Section 2(5)(a) and (b) of Act determines in what circumstances a co-owner will be eligible.