LM,
My understanding is that NO insoluble or ignorable problem has been identified or indicated with the systems critical to flying in IMC/poor WX conditions.
Rather the problem is that the software cannot be validated to a standard that would GUARANTEE that such problems cannot or could not occur.
However, it is believed that such a failure/problem would require all of the displays/feeds to the AFCS to suddenly, simultaneously be giving the same erroneous data to the displays (all at the same time and all agreeing with each other) - something that the TPs felt was improbable and no more that a hypothetical risk.
But because the source code can not be proven, you can't absolutely, unreservedly guarantee that it won't happen, leaving Boscombe with no choice but to give an "unacceptable" recommendation.
However, many systems have (quite rightly) been given a release despite such a judgement, after the risk has been properly evaluated. (Boscombe merely identify the risks - the IPT then assess them and get the MAR signed).
However, because these are Chinooks (a type involved in what is still being described as the RAF's worst post war accident) and because these particular aircraft have been labelled as having been judged unfit for release (in Parliament, in the Press, everywhere!), if they were now rushed into service, and one were then lost, the solids would really hit the rotating ventilator and the less supportive elements of the press and the lawyers would have a field day.