Disclaimer: I am no expert on aviation, I solely got this information via your paper and a little bit of research about the used variables.
First of all I can't follow your deduction. If you would have $V$ higher than $V_{stall}$ and $C_l$ lower than $C_{l,max}$ the equation should still hold. What you decrease with $C_l$ you increase squared via your velocity. So all in all the left side should not decrease and therefore $L$ should not decrease.
Furthermore the paper states
Equation (5.5) states that lift equals weight in level flight, and that at stall
speed, the aircraft is at maximum lift coefficient.
So this is rather a deduction than an assumption to base design on. So for level flight for a given $V_{stall}$ you cannot decrease $V$ any further without increasing the angle of attack. However since you already are at $C_{l,max}$ you risk stall if you do decrease speed further.
This is now in contradiction to Carls answer: The pilot would then have to extend flaps in order to fly slower than stall speed because the angle of attack cannot increase further.
Values range from about 1.2 to 1.5 for a plain wing with
no flaps to as much as 5.0 for a wing with large flaps immersed in the
propwash or jetwash.
If I understand the paper and my research correctly, the misconception here lies within the assumption that you would use the equation with given values and disregarding that the values are not independent from one another.
$$C_l=\dfrac{L}{\frac{1}{2}\rho v^2S}$$
Is just rearranged to solve for $L$. You do not choose $C_l$ but you determine it experimentally. See this reference
One way to deal with complex dependencies is to characterize the dependence by a single variable. For lift, this variable is called the lift coefficient, designated "Cl." This allows us to collect all the effects, simple and complex, into a single equation.
I hope this shed some light on your question.