When they reissue licences CASA seem to include every operational approval (or non approval in this case) that was ever on your old ticket, even though it may have long since expired.
I reckon holding a IR M/E will over ride the earlier restriction on your PPL, in just the same way as having a CPL allows you to do more than the PPL, even though the latter has not been withdrawn. It is just CASA's curious way of doing things. It's probably because they have non-technical office wallahs doing this stuff and they are incapable of making decisions. Which is probably just as well.
Have a read in the rules again of the privileges conferred on holding a command Instrument Rating.