Are officers and enlisted with prior relationship with each other really allowed to continue the relationship?

Yes. Pretty clear: prior relationships are grandfathered.
One of my 3 best friends in this world was an Army SGT long before I was commissioned as as a USAF 2LT

There’s an exception for the Reserve Component. Otherwise the restriction is very clear. Some Commanders may choose to look the other way but you can’t count on it. I’ve known officer-enlisted married couples. But they were rare in my time on active duty.

I know in the army that prior relationship clause only counts for those that are to be married or are otherwise related.

Officer and Enlisted relationships really depends on what kind of relationship it is. If it is a romantic relationship, Army regulation states, you have up to one year from commissioning to get married or end the relationship. If it is a friendship there is no policy that states that an officer can not be friends with an enlisted member. However, it is all about perception. If it is perceived that the friendship undermines good order and discipline then it can be construed as an unprofessional relationship. Much like others have stated, if it is a life long or service long friendship then I, personally, would not end it. But, I would not bring any attention to the friendship either. If it is romantic in nature, I didn't see much in the AFI about this, I would either get married prior to commissioning or end the relationship. This is a tricky one and you have to decide what is the best course of action for you and your career. I hope this helps.

My girl friend when I got commissioned was a Pfc. my battalion commander told me she’s not in our chain and you had a relationship when you were enlisted. But don’t get a new one.

With few exceptions, I think you will find that the friendships become more distant once one of you gains a commission. Even treasured friendships are hard to maintain once one of the friends makes a transition to a different social or cultural circumstance; and even today there is that divide. Officer/Enlisted status in a marriage can be another complication added to the long list of accommodations that marrieds have to make in their adjustment to marriage. Do I have dear friends who were enlisted when we were on active duty? Absolutely, and some of them were SNCOs when our friendship developed, but marriage? I wouldn't recommend unless one member was leaving active duty. It may be allowed, but I would think long and hard about the wisdom of the decision.

Plenty of officer-enlisted married couples...Its grandfathered. But they will never in the same COC.

It's a tough situation. And it depends on your commander and whether you work with each other. If you do, all bets are off. We had a couple of enlisted officer marriages and the officer was told, no command billets until your spouse gets out or retires. I was always very cautious and professional with my enlisted folks. None of them seemed to mind and many of them are in my life now that we all have retired. I have sworn in some of their kids.

The AFI should stand on its own. It should nest with the DoDI. There is no tradespace. The exception is that people may marry, but can date. How you do that I have no idea. If the marriage predates the promotion then it is ok. Had a Company Commander of one company whose husband was a 1SG of another company. Married as E5s.

Officer to enlisted marriages are acceptable. Post commission hookups or friendships not so much. Just not a good idea because no matter how you protect it the one time something good happens it will be int he eyes of the others it was because so and so knew so and so and the same withthe bad things if you were to get off the charges...rightfully so doesn't matter...it happened because they made a phone call to thier friend etc and their goes good order and discipline. IMHO...just not a good practice.