Whilst I would agree that a good aircraft Commander will take into account the information from his crew about their fitness for duty in law there is only one person who can exercise discretion and that is the aircraft Commander.
Yes there is a requirement that he/she "consults" with crew members before reaching such a decision but, in my opinion, if he/she consults with his crew and they say "we're all too tired to continue" he is still legally entitled to say "Well I am exercising my discretion, we are going to continue the duty to XYZ etc" because he/she had consulted with the crew.
As a crew member you can say "I am not fit for duty and am therefore standing down as crew" but legally you cannot say "I am not exercising my discretion" because only the aircraft Commander can do that.