Don't worry bushy, it will all become clear and simple under the new rules. They're just around the corner.
If you look at reg 215, you will see that operators are obliged to ensure that their ops manuals contain and deal with certain things, and to revise them as required. Subject to two exceptions, operators are obliged to do so unilaterally – that is, off their own bat without the approval, acceptance, endorsement, blessing or whatever, of CASA.
The exceptions are:
1. The "operational specifications" issued by CASA pursuant to subsection 4 of CAO 82.0, which must be included in a discrete section of the ops manual which cannot be changed without CASA approval; and
2. Directions issued by CASA under reg 215(3) requiring certain things to be included in, taken out of or changed in an ops manual.
However, only the important people in CASA have those powers, because their exercise is fraught with risk for CASA, as the circumstances you describe show.
CAO 82.1 subsection 2.5, CAO 82.3 subsection 2.6, CAO 82.5 subsection 3.4, and CAO 82.7 subsection 5.6 purport to be directions about the content and structure of ops manuals, but they do not have the effect of saying, for example, that "your ops manual must provide for rich of peak operations".
Despite what language might be used, CASA does not approve ops manuals. An ops manual is just one of the documents – albeit one of the most important documents – which CASA uses to reach the requisite satisfaction under section 28 of the Act. A refusal to "approve" an ops manual is actually a refusal to issue an AOC on the basis that CASA is not satisfied that operations in accordance with that ops manual would be in compliance with the rules.
If someone in CASA said they were not prepared to grant an AOC to me unless I included in my ops manual something I considered to be stupid or unsafe, I would nod and smile, change the ops manual to say what CASA wanted it to say, and then change it the second the AOC was issued. Indeed, I would consider myself to have a legal obligation to change it: reg 215(5).
If CASA then kicked up a stink, I would say: get someone important to issue me an "operational specification" under 82.0 subsection 4, or a direction under reg 215(3), and please note that if you do so, I will send a copy to my and your insurers.
As to the circumstances to which you referred, I think the FOI was very brave to do what you say he did. My prescription for him would be:
1. an AVGAS enema; and
2. intravenous Deakin articles.