Please remember, as stipulated in DGR 220.127.116.11.4; 7.0.1; and 18.104.22.168(e), fundamentally all packages must be of such size that there is adequate space to affix all required markings and labels. This fundamental requirement is absolute and it stands.
The statement found in PI 968 Section II is not permitting a small inadequate package. It is giving some room for the shipper an excuse to apply the CAO Label and the Lithium Battery Handling Label not in proximity to each other if the situation so dictate. Please do not interpret the PI phrase as an acquittal or a pardon.