As I understand it, an examiner can disqualify a candidate who plays from a copy that breaches copyright.
However, copyright status isn't always clear. A candidate can make an honest judgment that a copy is legit yet feel insecure about using it in the exam room lest the examiner takes a different view. This can led to heavy precautionary spending on publications that aren't really needed.
(I can hardly believe that examiners or the ABRSM want to complicate their lives with legal niceties but they seem to reserve that right to themselves.)
I think the board should either drop its threat or undertake to rule on copies prior to exams. What do other teachers think - or know - about this?