for instance if i wanted to travel to BGI on BA and could book ex NQY, i could be protected if a delay happens and have my bags transferred between LGW south and north
Correct. And BA don't really want people to book those tickets as stand alone either, hence the high prices. They'd rather have someone flying to HKG, LAX, JNB etc who can use that seat and they'll obviously benefit much more.
It's a very good tool for both carriers actually. BA can remain in the regions (sort of) and passengers are able to book fares around the world on one ticket from their local departure point. Also, BE will then be able to sell seats they may not have been able to do so otherwise.
A quick question. Say a passenger flying BA from NQY to say, BGI (example used before). If they're flying F/J, I'm guessing they're allowed to take their full BA weight allowance on the BE flight?