ILR as a concession when applying for naturalisation

[Relatively Fat]

The booklet AN - the Requirements - October 2013 says:

3. BREACH OF IMMIGRATION LAW
You should not have been in breach of immigration law during the residential qualifying
period. You should have been here legally. In other words, you must have had the necessary
permission under the immigration laws to be in the UK. You may be refused if you have
been in breach of immigration laws during the residential qualifying period. This is
especially relevant if you came to the UK as an asylum seeker and your application for
refugee status and any appeals were refused during this period.

If you came to the UK as an asylum seeker and/or as an illegal entrant (you entered the UK
clandestinely) you must have evidence that you were here legally during the residential
qualifying period. You may be in breach of immigration laws during the residential qualifying
period if you had exhausted all your appeal rights and had not left the country, even if you
were subsequently given indefinite leave to remain as a concession. If you were not covered
by temporary leave to remain during the whole residential qualifying period while appeals
were under consideration, then your application will fail on breach of immigration
conditions. Just because you were given indefinite leave to remain does not mean that
we will automatically disregard the time you were in breach of immigration laws during
the residential qualifying period.

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Now, a friend of mine was granted IRL/Settlement whilst his case was being considered by the high court. He had been refused asylum twice by the Home Office and twice by Immigration Tribunal. But for some utterly unexplained reason, he got a letter from the HO saying he's been granted Settlement. He enrolled his biometrics and then received his IRL on 25th March 2014. He's waiting to apply in April 2015.

He arrived in the UK in Jan 2007 as a minor and was granted Discretionary Leave to remain till 2009. Between 2009 and 25th March 2014 he was going through his multiple unsuccessful appeals till out of the blue got granted ILR.

Is he in breach of immigration law and rules at all?
If he is in breach of immigration law and rules for the purpose of the 5 year residential qualifying period?

[Relatively Fat]

Is no guru able to answer these questions?

[vinny]

See also Annex B: residence requirements.