Re ARC subsequent issues, it comes down to how much a new CAMO trusts the previous CAMO. The buck, as usual, stops with the last signature. Personally, if an unfamiliar aircraft turned up on my doorstep for an ARC issue, no matter how many ARCs it has had before, I would ensure that ALL mandatory requeirements had been complied regardless of what another engineer said.
Now of course if all engineers were created equal then it wouldn't be a problem, but....
The CAA may state what the legal case is and what they require but they aren't going to have their licences pulled for someones elses failings.
As for the interpretation of allowing items to continue 'on condition' where the Maintenance Manual states otherwise, I know what my CAA surveyor would say to that.