If you charter a jet there is no law against each individual paying their way.
Yes there is. It then doesn't become a sole use charter. The person (s) then selling the seats becomes a) tour operator or b) travel agent. In other words, lets say they took your £1000 for a flight to Nice, and then they went bust, you would have no recourse to get your money back. You may also find that the underwriters would not cover any 3rd party costs regarding the pax in the event of an accident, if legally they weren't supposed to be on board.
This isn't even a legal loophole, it's just a lack of knowledge and research into the legislation.
Don Coyote explained it all very simply with the extract from the CAA web page. If people decide to ignore the basic rules then I guess anything is possible. It will only be a problem when something goes wrong.......which it will.