Can one now fly abroad on this arrangement?
Only if they file a difference to ICAO on this, which is IMHO unlikely given that EASA is "going to" terminate national licenses from 2012 or so.
Whether anybody abroad will notice, I have no idea. But I wouldn't like to argue this with an insurer - the one thing they do is check whether the flight was legal before it got off the ground.
The more interesting Q is why they are doing this. Is this some kind of "EASA pre-emptive" action? It certainly looks like it; it will make the EASA LPL (with a GP medical) look more or less the same as the old CAA (non-JAA) PPL (also with a GP medical), opening the path for various options... which could be interesting since the EASA LPL is a complicated animal whereas the old CAA PPL is a bit of paper which lasts for life.