I think the bit in red might be what people are getting confused about?Schedule 1 Housing Act 1988
Tenancies which cannot be assured tenancies
10(1)A tenancy in respect of which the following conditions are fulfilled—
(a)that the dwelling-house forms part only of a building and, except in a case where the dwelling-house also forms part of a flat, the building is not a purpose-built block of flats; and
(b)that, subject to Part III of this Schedule, the tenancy was granted by an individual who, at the time when the tenancy was granted, occupied as his only or principal home another dwelling-house which,—
(i)in the case mentioned in paragraph (a) above, also forms part of the flat; or
(ii)in any other case, also forms part of the building; and
(c)that, subject to Part III of this Schedule, at all times since the tenancy was granted the interest of the landlord under the tenancy has belonged to an individual who, at the time he owned that interest, occupied as his only or principal home another dwelling-house which,—
(i)in the case mentioned in paragraph (a) above, also formed part of the flat; or
(ii)in any other case, also formed part of the building; and
(d)that the tenancy is not one which is excluded from this sub-paragraph by sub-paragraph (3) below.
I'm not entirely sure, but I do not think it says that the LL must live there "at all times". It seems to be saying that the LL must have owned* the rental property "at all times" since the tenancy was granted (and that he must have been living there at the time the tenancy was granted as in 10(1)(b)).
If I'm right, then I presume this is to address a scenario where the original LL sells the rental property, but the new owner doesn't live in the building, so the tenancy would then cease to fall under para.10.
* Or perhaps have been the legal LL.