the above regulation only allows one to exercise LAPL privileges in Part 21 aircraft.
Not so and would be silly if true. The UK CAA gave all the same privileges to licenses issued in accordance with EASA to also fly Annex 2 aircraft as they were called then. LAPL holders have always been entitled to fly non part 21 aircraft.
We sometimes have to use 'common sense' and apply care not to become 'barrack room' lawyers. As is being demonstrated, some are in the danger of spiraling into a never ending fall to nowhere. The PMD form is quite clear the associated notes that go with it are comprehensive. There is no need to dig anywhere else because it is pointless.