You are reading it correctly. Unless an ammunition bin is almost empty, an explosion is usually lethal. AGoAC does not cover this, but this is why most mechs will automatically eject the pilot the moment an ammunition explosion happens. The damage to the pilot comes into play in the case of a mostly-empty explosion, and if you're playing a campaign and need to assign an ejected warrior to a new mech. (In addition, once you move on to Total Warfare or the BattleMech Manual, there exists equipment that allows a mech to survive even a large explosion.)