He can do what he wants if he's not conducting instrument flying (under a hood or IMC) and joins the circuit in the appropriate manner. There are many instrument approaches that involve heights, tracks and distances that remain well clear of the circuit until probably half way inbound.
All he should do is broadcast is that he's airworking on the navaid overhead the aerodrome and then can fly whatever tracks, distances, time intervals etc that he wants provided he doesnt infringe the circuit. A good lookout is all that is needed and some situational awareness.
That regulation has absolutely nothing to do with VISUAL flying in Day VMC. It refers to using IF hoods under the VFR.