Meanwhile, back to your question.
I think most of your points have been addressed and in particular the insurance issue has been well explained by ‘Chico. But I’ll add my two pennyworth.
Of course your assumption (Illegal spacing on plate = no MoT/unroadworthy = no insurance) is completely incorrect because:
• An MoT lasts a year and it only relates to the condition of the vehicle at the time it was tested. If the condition of the vehicle changes during the certificate’s currency it does not invalidate the MoT.
• It is a considerable stretch to suggest that a mis-spaced plate renders the vehicle “unroadworthy”.
• A lack of MoT and/or unroadworthiness does not invalidate the Third Party insurance required by law (as explained by 'Chico).
So that’s the plate issue dealt with. Now the lights. All new car models have to undergo “type approval” by the Vehicle Certification Agency (VCA). This ensures that it complies with the various Construction & Use regulations (some of which you’ve quoted) and other legislation (such as emissions). I would imagine that somebody in the VCA would have by now highlighted the fact that some DRLs of the type you describe do not comply with those regulations. Since it seems they have not I would say with some confidence that they do, in fact, comply. As a brief comment I think the section you cite is designed to ensure that vehicles do not display flashing lights of any sort. DRLs which extinguish when, say, an indicator is switched on can hardly be construed as a flashing light.
I don’t quite know what the basis of all this is. You say you are “just stirring up the mire”. But you see to be going to an awful lot of trouble to do so, especially as you say you are consulting a barrister. I might hazard a guess that you have been involved in an accident with a vehicle with an illegally spaced number plate and DRLs (or your vehicle has these features). In any event I believe you are wrong with both your assumptions.
Finally, I don’t really understand this:
“…if i am hit by a car with a miss-spaced private plate, could I claim that they are not insured and sue them privately?”
Why would you want to claim they are uninsured? Firstly, it is not a matter for you to determine anyway and you have no basis to make such a claim. But surely it’s in your interests to do nothing that might jeopardise their cover. It must be simpler to have your damage dealt with by their insurers rather than sue them. Unless, that is, you really are “just stirring up [their] mire”.