Flying over the crowd is permitted by the waiver I quoted earlier, but I would hold that this applies to a paying crowd and not an entire townscape
Very few venues where crowd rear arrivals (CRA) are approved and flown that don't involve the overflight of a built-up area beforehand. This is all considered as part of the approval to fly a CRA at any specific venue. Suitable 'escape' options have to be available until the formation is then 'committed' to continue over the crowd at the event. The options for any single-engine aircraft in the formation are key to this approval.
Look at somewhere like Bournmouth and you have a 'deep' built-up area prior to reaching the main crowd then display line. Perhaps a Hawk has the speed (energy) to fly clear following an engine failure but a Hurricane couldn't.