this actually places a limitation on the holder of the rating and legally they cannot give aerobatic instruction whereas a person who does not have such a limitation can.
We may have agree to disagree on this one, Whopity. Instruction in aerobatics is not a privilege of the JAA FI rating. JAR-FCL 1.335 states that the privileges of the FI rating are, given certain levels of experience, to instruct for the issue of the PPL(A) and class and type ratings for single-pilot aeroplanes, the CPL(A), night flying, the IR(A), the FI(A) and the MPL(A), none of which includes aerobatics in the syllabus. How is it logical to put a 'No aerobatics' restriction on an FI rating when the rating does not include the privilege in the first place?
There is nothing in the ANO that prevents the holder of a valid aeroplane licence from giving instruction in aerobatics, since it is not instruction leading to the issue of a licence or rating. If subjected to an appeal under Regulation 6, the CAA could be made to look extremely foolish in attempting to remove a privilege from an individual's licence on the sole grounds that he or she had gained an FI rating.