I can't think of any strong reason - all Penang and Malacca British subjects were automatically Malayan citizens under the Federation of Malaya Agreement 1948, and it seems contrary to the spirit of the draft Constitution, which was at the request of the main parties amended to prevent the exercise dual nationality - admittedly this was more concerned with Chinese and Indian nationality than British.ppron747 wrote: I believe the absence of a loss provision was actually agreed following representations from the people of Penang and Malacca. What I'd be interested in knowing is why these representations were accepted. Was it something to do with ethnicity?
I remember being told that the British government gave assurances that Penang and Malacca would retain some sort of special status. Possibly it was seen as a cost-free way of reassuring Penang and Malacca citizens that independence would not disadvantage them, and they could at any time choose to give up their Malayan passports for a UK one. At that time there was no benefit to being a CUKC rather than another British subject other than the passport.