Let me get this straight...your CAA guy says the trusty Police K-9 is unrestrained cargo? Does he consider a seeing eye guide dog to be unrestrained cargo as well?
I suspect the decision may have been influenced by the fact that the dogs TC will be carrying are also trained for "manwork", which these days has been politically correctly

renamed as "criminal work". It basically means biting people very hard and hanging onto them. They have been known to do this at unexpected and inopportune moments (not mine, of course

)and could be a contributory factor in an "interesting" flight profile