If it is legal to let a passenger fly the aircraft, then where is the regulation which says someone flying the aircraft is not the sole manipulator of the controls - if the PIC does not manipulate the controls?
There is a difference between not being illegal, and being legal. It is not illegal to let a passenger fly the aeroplane, but the experience gained cannot be counted for recency purposes if the claimant is not a crew member. 90 day recency means they have acted as a pilot for the purpose of 3 landings and take offs. If they are not qualified to do this with a person on board who meets the legal definition of a passenger, then they have two choices, gain the experience solo, or with a person qualified in accordance with Art 80.
This regulation came straight from the JAA not the CAA, if you think it is badly worded, look at Part FCL, it is riddled with similar English written by people whose mother tongue is not English. The CAA can only give an opinion, it takes a court to give a ruling.