Sham - you right, except that even after HRA, ECtHR can sometimes be relevant.

This Act is so dreadful that the only really sensible thing to do would be to tear it up and start again.

Quite apart from the "two in a bar" exemption, the other thing that has been lost is the liberty to perform music at all times and in all places where it is/was not "public". All folk clubs in pubs that operate under the figleaf of being private members clubs will need licensing under the new law. And before the "acoustic music" relaxation of licence conditions can be applied, a licence permitting music will first have to be obtained, so any capital requirements will have to have been observed.

If the guidance purports to permit that which the Act does not, then it is ineffective and unlawful, and someone like Norris McWhirter will (probably successfully) seek judicial review of it, so invalidating it.

What will also probably eventually happen is that someone will bring a claim (or run a defence) under the Human Rights Act, turning on the definition of "incidental" (although it could also be in pursuit of a declaration of incompatibility with the ECHR), and the courts following the obligation to strain every meaning to comply with HR obligations, will find that "incidental" is much much wider than Howells has said was intended - maybe along the lines of the assumptions behind the drafts I prepared about "incidental" anamplified music namely that "incidental" included most things that were not the primary purpose.