There is no grey area. The "safety pilot" is someone that Kenmore Air wants aboard. So far as any regulatory body is concerned, you're a rated pilot, flying with a passenger. You're the pilot in command. Whatever you do do please insurance requirements, or the company renting the airplane, is irrelevant so far as regulations go, and there's nothing grey about this.
There is a grey area if the "safety pilot" wants to log time too. If so then he must be an instructor, and in which case although you can log PIC as per the FARs as far (boom boom) as the CAA are concerned, if this is for the issue of a JAR license then this time is theoretically DUAL (as an FI is onboard).
If said SP doesn't want to log time, then so be it, you are free to log PIC and you will keep the CAA happy. I suspect though that they will, especially if an FI.