Any flying you do with an instructor is for the purpose of obtaining or re-validating a licence or rating
I would disagree with that statement. If you've just passed the LST for a JAA PPL(A), then your licence will be valid for 5 years and your SEP(L) rating for 2 years. Any flying you do in the first year is irrelevant for revalidation purposes, so if you do 10 hours of dual with a FI just for hand-holding or club currency purposes, that doesn't meet the criteria.
It does not say that you cannot do further training if you have applied for a licence.
Quite correct, I agree. As long as that training is for the purpose of becoming qualified for the grant or renewal of a licence or rating. So therefore, not just some general flying to keep current.
it is not unreasonable to do consolidation (revalidation or differences) training whilst you are waiting.
If it's differences training, then yes, my interpretation would be that's okay as it's a variation of a rating. However I still can't see how you are interpreting consolidation/currency flying as meeting the criteria for the exemption to apply.
It seems to me that we are both reading the same couple of lines in the ANO, but interpreting it differently, so perhaps we'll just have to accept we disagree. I do though totally agree with you that it's reasonable, sensible even to let people keep flying while waiting for the CAA to process their application. I just don't think it's legal unfortunately! I would also accept that plenty of people share your opinion, judging by some of the earlier posts, stating their RFs/FTOs/FIs let them fly during the period in question.