If a PPL from another country that allows PPLs the right to fly VFR out of sight of the surface flies a G-reg aircraft in this country (presumably after validating his licence here by whatever route) then is that pilot allowed to fly out of sight of the surface in this country?
Yes. The holder of a French PPL can fly a G-reg VFR out of sight of surface, in UK airspace or anywhere else for that matter. This is because most countries have not added the "in sight of surface" requirement to their private pilot licenses.
Similarly, an FAA PPL holder can fly an N-reg or a G-reg in UK airspace, VFR, without sight of surface.
The UK ANO automatically validates all ICAO PPLs, for flight in a G-reg, worldwide. If that ICAO license does not have the "sight of surface" requirement, then any such license holder can fly a G-reg out of sight of surface.
If he flies an aircraft here that is registered in the country that issued his licence, can he then legally fly out of sight of the surface?
Yes. The "sight of surface" is a license requirement of the UK PPL, only. (I vaguely recall South Africa has a similar requirement but I know of no others in Europe)