score:3
Luther doesn't deny the existence of true Christians, throughout history, within the church controlled by the popes. For instance he writes:
βDo you not think that God was able to preserve His own under the papacy even though the priests and monks have been the devil's teachers in Christendom and have gone to hell? Very many children and young people have died in Christ. For Christ, even under the Antichrist, has with might preserved Baptism, the bare text of the Gospel in the pulpit, the Lord's Prayer, and the Creed, so as to preserve very many of His Christians and thus His churchβ. (from his letter on translating and on the intercession of the saints 1530)
The quote you give from his Large Catechism should be understood with reference only to those who were taken in and deceived by Roman Catholic teaching. Children who heard the text of the Gospel could be saved through believing it without realising that their church was corrupting the meaning. Likewise older people if they placed their trust in Christ alone could be saved. Luther approved of the practice within the Roman church of a crucifix being placed before the eyes of dying people because it brought to their attention the suffering and death of Christ who alone, apart from works, could save them.
To Luther the true Church is invisible because it's composed only of those with true faith in their hearts, and no one can see another's faith. So within the visible Roman Catholic church you basically had (and have) two different entities: the false church which followed the teaching of the popes, and the true Church which followed the teaching of Christ. Of course this latter was obviously in a weakened state because it had failed to recognise the heretical nature of the Papacy, but it was still part of the one true Church that existed throughout the world wherever faith in Christ was found.
With regards to the Roman Catholic clergy of Luther's day it appears he didn't think any of them were true Christian teachers. Yes in previous centuries he recognised some of the clergy as being true Christians like Augustine and Ambrose but that's going back hundreds of years before the establishment of the Papacy and the corruption in doctrine which afterwards took place. Luther was confident that if Augustine had been alive when he (Luther) was, that he (Augustine) would have joined him in separating from the Roman Catholic church.
Upvote:2
I think he is speaking in the abstract. But without reading more context, I can't be sure if the entire passage is meant that way.
Take the first quoted sentence:
For where He does not cause it to be preached ... it is lost.
I think the rest of the passage is meant in the same context. In other words, I think the point he is making (by reordering the sentence) is:
For where Christ is not preached ... there is no Holy Ghost [and] ... it is not a Christian Church, either.