It is more than discouraged. With the exception of congested conditions, the HC says “Do not overtake on the left or move to a lane on your left to overtake”.
It is not a specific illegal action (i.e. you cannot be charged with “undertaking”), but then neither is overtaking on the brow of a hill (unless double white lines are present). But actions such as these can by themselves, constitute careless or even dangerous driving.
I believe the main reason it is bad practice is that drivers, having completed an overtaking manoeuvre in lanes two or three should not expect faster moving traffic to be steaming up on their nearside as they move back in. It simply cuts down, by 50%, the area of which a driver has to have cognisance when overtaking. I’ve driven on highways where undertaking is permitted and it is an absolute nightmare. Changing lanes is one of the most hazardous manoeuvres a driver makes on a motorway and it must be more sensible to restrict the faster flowing traffic to one side only.
Lane discipline on UK motorways is appalling. Jack, I’m afraid you are incorrect when you say “...motorway lanes, historically, have always been; Slow-lane, Fast-lane and Overtaking Lane.” The HC says that drivers should drive in the nearside lane. Lanes two and three are for overtaking only. And the safest way, Catch The Wind, to deal with the middle lane buffer, is to wait for a gap in the outside lane before overtaking. If no such gap materialises, wait behind the duffer (at a suitable distance without flashing your headlights). Driving on congested motorways needs tolerance and patience and if you don't posess both of those qualities in abundance you should steer clear.