johned0 - tis a good question! It's, to my mind, right in the heart of the grey area of Flight Training/Public Transport.
He has actually ended up getting into the situation purely from the fact that the helicopter's operator holds and AOC and he is a commercial pilot. If he'd been a PPL and stopped to help (and then paid for the whole flight) I suspect nothing would have happened.
The fact that he was a CPL meant that the moment he diverted from the Flight Training sortie he was on (I think I'm right in saying he had a trainee with him?) then it became, I guess, a flight that he was being paid to operate, in that he wasn't paying for it, and it wasn't a Flight Training exercise. That's my take on it and, I guess, is what the CAA are angling towards.
It's the presence of the Paramedic (a "passenger") on a flight training exercise that I would imagine has caused the problem.
It's the old "Trial Lesson/Sightseeing Flight" argument with a different slant. Technically, you cannot take passengers on a Trial Lesson, only the student; if you do then the flight is actually a public transport flight rather than a lesson. It's all hair splitting in reality, but the problem is the insurance and liability which would not be valid if there was an accident - and I would guess that's what the CAA are trying to police. But it's Christmas and they're not (all) arseholes so I'd guess at it being OK.