My first post on pprune and speaking from memory as it's many years since my load planning days !
I'd suggest the definition of "ballast fuel" quoted is misleading.
Ballast fuel can potentially be used on any aircraft and seperate tanks are not a requirement.
It can be quite common (or was) to use fuel as ballast on some passenger a/c which were tricky to trim on positioning flights.
The old BAC 1-11 was a good example of this ....
The ballast fuel could be used to get the weights up to keep within the positioning trim limits (and avoid loading actual ballast).
The physical location of the fuel was the same as the "normal" fuel.
The key thing is that the loadsheet clearly identifies the fuel that is carried as ballast and as such makes clear it is not available as "contingency" etc en-route.
To my mind the system described in the first post is handling this correctly..... the ballast fuel is indeed part of the FOB ..... however, it's not "usable" and so is deducted from the t/o fuel .....
As it's being used as ballast you very much need it to be part of the DOW calculations as that's where it's having it's ballast effect.
Edited to add: I concurr with DB's view .... ballast fuel is technically usable (it's in the tanks and can flow to the engines) ..... whether you'd want to might depend on the circumstances !!