But it is not an amibiguity.
Sure it is.
He can prepare the spell since it is on his cleric list - so he can prepare it as a cleric (non-domain) spell following the rules for preparing those.
I agree. It would be nice if the rules said that. Instead, you had to.
What the text under domain spells says is that he can't prepare it as a non-domain spell unless it also appears on his cleric list.
Right. Which it does.
It does not say he can prepare it following the domain spell classification.
Earthquake is a seventh-level domain spell.
As a domain spell, the cleric cannot prepare it in additional slots
unless it is on the cleric list. Which it is.
Note that at no point does
earthquake stop being a seventh-level domain spell.
So it is a seventh-level domain spell, that, because it is on the cleric spell list, can be prepared in other slots. Since it's a seventh-level spell, those other slots can be seventh-level slots.
That is the counter-argument, and by the SRD, so far as I can tell, it holds up fine.
As I've said, I agree with the other argument, but that doesn't make the above argument logically invalid. The issue is that the rules introduce an exception without properly limiting the scope of the exception. We can induce that the exception is intended to be limited, but we cannot deduce that. (At least not by the SRD. I
still haven't checked the PHB.)
Yes it could have been clearer but do we really need for them to add on another large amont of pages to the book just to restate existing rules?
"A cleric spell that appears as a lower-level domain spell can only be prepared, at that lower level, in the cleric's domain slot." Or, to paraphrase how you put it, "A domain spell that also appears on the cleric list can be prepared in other slots under the normal rules."
That's a statement, not a restatement, because the rules are otherwise ambiguous. And it would take hundreds of such clarifications to amount to any appreciable additional page count, even assuming the section couldn't have been written more accurately and concisely in the first place.
Of course, I realize at this point nobody will be able to admit it's ambiguous, so I've wasted my time typing this. I wish I'd thought of that 10 minutes ago.