I would agree with you if the FCL wording was "An FI shall have his/her privileges limited .....to the following cases:" but the preposition used is in not to
An FI shall have his/her privileges limited to conducting flight instruction ....in the following cases:
Another point in the favour of my understanding: ......It's not written that the FI may be restricted to instruct for the night rating......
Yes it is.
FCL905 Lists the Privileges that nay be attached to an FI Rating and includes both Night (e) and IR (g).
FCL.910 Lists the limited Privileges that an FI(R) can exercise. IR is not mentioned, but Night (4) is.
Which doesn't change the debate at all as it still requires an interpretation of what being included (or excluded) from the list in FCL.910 actually means.
It does not matter whether we agree or disagree. No Privilege can be exercised until it has been entered on to a Licence, so it is solely the interpretation of a Competent Authority that counts.