Presumably, if BC are involved there must be building work going on, or a change in use? Would be useful to know what the scope of works is, as that can influence what's reasonable, as regards compliance with the guidance?
In defence of BC - they may wish to consider what the building might be used for, as well as what it is used for; similarly if the safety of the premises is based particularly heavily on management - can that be relied upon, & even if it can now, what if that changes in the future? After all, once BC approval is gained, any activity that fell under the purpose group 'assembly and recreation' could be undertaken in the premises - so what if a wedding venue becomes a music venue? What if the management changes? One of the main reasons that we design using floor space factors is to allow a reasonable degree of flexibility, the potential unreliability of management measures and to cater for change (whether foreseen or unforeseen).
Having said all the above, I'm not sure that they can absolutely insist on 100% compliance with the guidance. You could always go for a determination?