Hmm, I didn't specifically think of the case where the Source code is not a high level language, but a code generator is used to generate a high-level language which is to be compiled with gcc. E.g. someone might have some assembly Source Code which they translate to C to migrate to new hardware, and for some reason the assembly-to-C translator is not GPL compatible. Presumably we want to allow the use of GCC as well.
However, the wording I gave should cover this fine as well - the assembly / object code generated from the generated C code is in this code Target Code with can be generated by an Eligible Compilation Process from the generated C code. Still, this is something to keep in mind when trying to further amend and/or simplify the proposal.