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Neil1/ It has always been illegal to drive a dangerous vehicle even if it has not been confirmed by an expert. That has not changed.
2/ It has always been possible for a tester to mark a fault as dangerous, the system now takes responsibility for that decision. I think that is better for the tester.
3/ Who is going to record when a 40+ vehicle has been significantly modified?
If it is not recorded how are the police to know if it should or not have an MOT? I find the presumption that all owners of 40+ vehicles are all fine upstanding law abiding citizens a bit odd. That is certainly not my experience.