hobbit1983, that was NOT the question...
bose-x, unfortunately the UK CAA has no regulatory discretion in this matter and the most recent information I have was communicated directly by CAA Policy Lead - Licensing, who wrote in Nov 2016
Although this was raised in 2013, as you point out, EASA have not produced any regulatory material and the UK CAA has yet to define and publish an effective policy.
However, he also advised that the UK CAA would support credit for students moving from a LAPL course to a PPL course, subject to a TNA by the ATO/RF. But Köln refused to endorse his proposal.
This was raised again at an EASA/Industry/NAA meeting in late Jan 2017 at which LAA was represented by Europe Air Sports, so I'm surprised that the message didn't get back to the LAA. Unfortunately, despite the topic having been discussed at length, perhaps because EASA knew full well that their behaviour over this had been clearly less than reasonable, the discussion was omitted from the MoM....
There was another Industry/NAA meeting in early April at which I proposed that EASA's intransigence should be formally challenged; unfortunately the EAS representative did not attend the meeting.
However, the CPL knowledge requirement limitation for PPL/FIs (as distinct to those limited to providing LAPL instruction) is well-known to RMT.0596, the rulemaking task concerning Subpart J & K (instructors and examiners), and will be further considered by RMT.0678 'simpler, lighter rules for GA'.
I don't know from whom Phil Hall received the letter to which you refer, but regrettably any interpretation other than that stated by CAA Policy Lead - Licensing, is incorrect.