How about this. 8.1 lets you fly below 500 ft when in the process of taking off and landing, in other words there is no height restriction when taking off and landing. This includes upwind, crosswind, downwind, base and final, although there is no need to go below 500 ft on crosswind, downwind or base of course, but they are all part of taking off and landing.
By definition, if you are able to go below 500 ft you must be able to go below 1000 ft. Therefore, 8.1 over rides the requirement to stay at or above 1000 ft over built up areas if these areas are overflown in the process of taking off and landing, ie in the circuit.