Luther: I honor the Roman Church. She is pious, has God’s Word and Baptism, and is Holy

Some time back (2009) I went through this quote from Luther:

I honor the Roman Church. She is pious, has God’s Word and Baptism, and is holy. (Martin Luther, from his sermon on Matt. 21:42, D. Martin Luther’s Werke, Vol. 47.425* – also know as the Weimar edition; English trans. from What Luther Says, p. 126.)

I mentioned in 2009 that this quote was scheduled to be part of a new volume of Luther's Works... and that volume arrived in my mailbox a few days ago. Here is the context of this quote:

Thus we hear which is the true Church, namely, the one that is built upon the cornerstone and becomes a spiritual house—those who are baptized, believe in Christ, praise and thank Him. The false church, however, are those who do nothing according to the Word of God, reject the cornerstone—Christ—and persecute His teaching, for example, the Roman court. In the höstel in Rome there is a German church. It is the best and has a German Pastor. But what does the pope do? He sits in his palace and makes people kiss his feet. Therefore, he is the devil's bishop. I respect the Roman Church. It is good, has God's Word and Baptism, and is holy. But the Roman court, [or] the pope, who is bishop in the court, he is the devil's bishop and the devil himself. Yes, he is the crap that the devil has s*** into the Church, for he does nothing other than that which serves worldly pride and pleasure, that he might become emperor and king and clean all the money out of the coffers. (LW  68:127)

When Luther spoke of the Roman Church, he had something much different in mind than most people do today. Luther made a sharp distinction between the Roman Church and the Papacy. For Luther, the Papacy was something from which one should flee. Luther's opinion appears to be in part that since the Roman Church was given the scriptures, sacraments, etc., in that sense she is a Christian church. However, these elements functions quite independently from the Roman magisterium. No analogy is perfect, but if I had to describe Luther's position I would do so like this: The Roman church is like a pristine ship that's been commandeered by pirates. The ship still functions, but it's crew is in bondage to her captors. Some of the crew mutinies and joins the pirates. Others though, maintain allegiance to her rightful captain.

What are the ramifications of Luther's view for Protestants today? Luther considering the Roman church to be basically Christian in some respects is not the same thing as Luther considering zealous defenders of Rome to be basically Christian. In other words, if a zealous defender of Rome selectively uses Luther's words as a basis to promote inter-faith dialog between Romanism and Protestantism, Luther would consider such a person to be a papist, and in danger of hell.

Addendum
My previous discussions of this quote are here:

Luther: I honor the Roman Church. She is pious, has God’s Word and Baptism, and is holy (2009)

Luther: A Church With Corrupt Leadership Can Still Be a True Church (2009)

Myth #11: Luther thought that the Roman Church was no longer a true Christian Church (2011)

Luther: The Roman Church is Basically Christian? (2013)