Military Flying displays are already restricted, and very closely regulated. You only need to glance through RA2000 or any Group Orders to see that a huge section of military flying rules are just about display flying - not only for the conduct of displays, but all other aspects, selection of pilots, training , supervision, authorisation etc. Much of this was prompted by the loss of XV239 (although clearly that was not the only accident that happened under the flexible rules of the time).
These days UK Military Aviation is, rightly, a somewhat risk-averse business in my view. If the relevant Duty Holders decide there is too much risk in current displays, then they will be modified.