I’m not 100% sure what rationale they gave - I think they’ve said he can keep the reg, but the conversion is a radical alteration.
Hes had a fall chassis, the original bulkhead rebuild and galv’d, paid £4K to have his engine rebuilt - £1500 for his gearbox and transfer box to be rebuilt, tons of genuine new parts and every fitting and nut and bolt restored - but the only genuine modifications are fitting a tilt, series doors, and different seats.
Its clearly nonsense - but what a world of trouble from just trying to do the right thing.