Hello Nigel,
I think it should be made clear that your comments relate to trailers with overrun brakes such as most caravans, as differnt regs cover unbraked trailers of differnt ages, a subject that was discussed on another recent topic.
Returning to caravans, the vast majority of cars do not have a suitable separate fixing point for the breakaway cable, so most caravanneers have little choice but to loop the cable around the tow ball, that has to be better than nothing, and it may not be illegal.
You have to look at the relevant Act of parliament or EU directive to find out what outcome is required. How you are to achieve that outcome is not defined in the Act or Directive, that is left open to interpretation.
In many cases committees of professionals who have technical interests in the subject produce Regulations, and these are often assumed to be the de-fact reference source on methods or solutions.
Unfortunately it is often forgotten that these regulations are just one set of interpretations of the Act, there may be other and equally valid alternative interpretations, and the fixing of the breakaway cable may be such a case in point.
Contravention of a regulation can only be deemed illegal if it has been specifically declared so by the courts. This leaves the potential for alternatives methods to the regulations to be found satisfactory, but they may need to be defended in court.
Having been involved in the caravan related industry in various positions, in 30 years I cannot recall ever seeing a broken tow ball. That of course does not mean it can't happen.
I have just conducted a search on the WWW, and surprise - no results for broken tow balls or hitches in the UK. There are references to incidents in Australia and the US, but these relate to the securing bolts on the ball or the subframes, one must remember that different regulations apply in those countries, and I believe they can tow much heavier trailers that we do in the UK that - still no UK tow ball failures.