That's all well and good, but we're not discussing an AFI rating, we are discussing an FI(A) rating.
An AFI rating is a whole separate thing, with different requirements to be met before you get a full instructors rating (ie, drop the A from AFI), and these days only really applies to microlight instructors who's experience levels are going to be nowhere near that of someone with a CPL teaching PPL on an SEP aircraft.
An FI(A) rating is only restricted until the requirements are met, and you have a sign off from an FI(A) saying he thinks you're OK. The legal text may well hold true if you have an AFI rating, but if you have an FI(A) rating, there is nothing illegal about being supervised by someone who is not at the airfield.
Obviously this comes down to the discretion of the club, and a brand new instructor in his first month will require closer supervision than someone who has been doing it for a year but only has 24 solo sign offs, hence why the CAA have only issued guidance rather than putting something hard into the law.