"Non-standard flights" for the purpose of that paragraph are clearly those seeking to use controlled airspace in a non-standard way:
1.1 A NSF in Controlled Airspace is considered to be an aerial task which does not follow published routes or notified procedures; a formation flight of civil aircraft, other than for VFR transit of CTA/CTR/TMA; ...
No NSF application is required for a simple sightseeing flight which adheres to normal procedures (i.e. talks to Heathrow on 125.62 and gets a S/VFR clearance on an ad hoc basis). The reluctance of the CAA to permit an NSF approval does not in itself mean that a single within that lateral area would breach rule 5(d). It's a pretty clear indication of the CAA view though!
It's worth noting that SERA is on its way, with an interesting change in wording.
UK RotAR 2007 5(d) says:
An aircraft flying over a congested area of a city, town or settlement shall not fly
below such height as would permit the aircraft to land clear of the congested area
in the event of a power unit failure.
Part-SERA says in its corresponding section:
3.1.2.1 Except when necessary for take-off or landing, or except by permission from the
competent authority, aircraft shall not be flown over the congested areas of cities,
towns or settlements or over an open-air assembly of persons, unless at such a height
as will permit, in the event of an emergency arising, a landing to be made without
undue hazard to persons or property on the surface.
The Part-SERA provision is considerably less restrictive, as it would in principle permit an emergency landing in a safe place within the congested area (and it might be argued that a ditching in the Thames would not present undue hazard).