I believe this depends on the circumstances. The CAA offer 2 types of deviation on the class 1 medical: short-term and long-term.
The short term deviation is as described above, with a possible lifting of the restriction after suitable experience i.e. a CPL. I think this applied to people who cannot pass the initial requirements, but would be fine with a renewal.
However the long-term deviation is exactly as expected. The CAA offer you a medical with a restriction to flying UK-registered a/c, because you are outside the JAA requirements but the UK CAA still deem you as fit to fly. The only way around this type of deviation is to request letters of permission from each of the the other JAA states... or to wait for the regulations to change. Not sure which one would take longer!