I think that means you can't deliberately target a Command unit, but the scenario you describe is a 'blunder' and unfortunately the FAO got his map references wrong and dropped the 'stonk' on his commander by accident, big oops.
In the game we all get around not deliberately targeting command units by dropping artillery on a nearby unit and hope that it deviates onto the command. I did it myself last night and managed to score no hits on 3 T34/85s but supressed the command. This amounts to the same thing as you describe.