Each ICAO contracting State is obliged to persecute and prosecute a national of that State, on behalf of another State in whose airspace an alleged offence was committed.
In practice, this works less than thoroughly (obviously what "thoroughly" means varies according to which end you are on
) not least because different States have different ideas of what evidence is required to have somebody hung drawn and quartered.
No doubt if you did something dodgy over Angola, they would ask the UK CAA to have your family raped and executed. The CAA won't do that because rape is illegal (even within marriage, in these enlightened times) and the death penalty was abolished in the 1950s (much to the derision of Lord Denning
).
In 2003 I busted one of the French power station TRAs, and the evidence the Frogs (DGAC) delivered showed I was under a radar service at the time, yet they said nowt. until 5 months later. Also the TRAs were not notamed, and to top it they did not appear on any charts for another year or two. The CAA just sent me a stiff letter and that was it. Apparently the French do this sort of thing quite a lot.
I don't think the CAA is especially limited in what they can do to a foreign pilot, relative to what they can do to a UK one. They can bust both, and they can turn over the aircraft of both to check for any
dangerous maintenance (lack of).
Whether the CAA would have asked the FAA to take certificate action against the pilot would depend on their view of what the FAA would think of the UK procedures implicated in that incident. It's quite possible that the CAA decided that a prosecution was simpler