Ok - but merely classified as 'improvement recommended' seems a bit inadequate for something which is non-compliant and as such can be deemed unsafe which by definition must mean, at least, 'unacceptable condition' and 'potentially dangerous'.
I would expect all observations regardless of code to be non compliant with BS7671.
depending on the circumstances I would agree with you that a C3 would not always be sufficient if you can prove that the MCB is overloaded regulary for long periods of times.