My interpretation is that the CAA do not explicitly allow it. They don't prohibit it either, they just don't include the flying of N-Reg aircraft as a privilege of holding an NPPL.
You will see in ANO Article 148 and 149 that the CAA do explicitly allow it.
The FAA (allegedly) say that they permit me to fly their aircraft, if I have a licence (issued by another country) that would allow me to fly that plane.
Here is the response from the FAA Chief Counsel to the CAA request for clarification:
https://www.faa.gov/about/office_org...rpretation.pdf
This response confirms that the privileges for holders of a NPPL, or LAPL, or holders of ratings such as the IR(R)/IMC may be exercised in N-registered aircraft.
Use of a UK-issued EASA licence in other member states is clarified here:
https://www.faa.gov/about/office_org...rpretation.pdf
So, if we do fly it, are we doing so under the FAA rules rather than the CAA rules?
Both sets of rules!
ifitaint...