Laboratory Spaces baseline system in warm climate and proposed building is electrified heating

If the metal shop is a lab space then yes that appears to a correct intepretation. There is more detail in the User's Manual (see below). Laboratories and Hospitals. Hospitals and laboratory spaces within a building having a total laboratory exhaust rate of 15,000 cfm (7100 L/s) or greater both must use System 5 or 7 for the baseline building system. Note that these systems use hot-water heat supplied by a gas (or propane) boiler, even in Climates Zones 0, 1, 2, and 3A where the baseline for all other applications uses electric heating. For these applications there are two scenarios, one where the laboratory or hospital occupies the whole building in which it resides and another where it occupies some portion of the building in which it resides. In either case, the choice between System 5 or 7 is driven by the size of the whole building and not the size of the laboratory or hospital. Per Table G3.1.1-3, larger buildings must have a chiller, while smaller buildings do not. Where a laboratory or hospital exists in a building large enough
to have a chiller, System 7 must be used to serve the laboratory or hospital. In all other buildings, System 5 must be used to serve the laboratory or hospital. Although Table G3.1.1-3 may indicate System 6 or 8 for a given baseline building size and climate zone, these systems may not be used for the portion of the building that is a laboratory or hospital.
While these systems are variable flow, they may not always operate as such in these applications. Where high ventilation or exhaust rates are required, the HVAC system must satisfy these loads and space conditioning simultaneously. This may reduce zone airflow modulation or require constant volume operation in some spaces. This is allowed by Appendix G. Although airflow within the laboratory is variable flow, the laboratory exhaust fans must be modeled as constant power. This reflects the operation of typical high-plume exhaust fans used in laboratory applications. These fans move a constant volume of air to maintain a high plume but vary the volume removed from the building. When the exhaust air is reduced, the remainder of the air moved by the fan is made up with outdoor air bypass at the fans.