Registering a child born outside of the UK as a BC when both parents are settled (non BC)

[annad]

I want to say a big thank you to all the people with amazing knowledge who are advising on this forum.

I'm asking today about registering a child (born abroad) as a BC. Both parents are EU nationals with settled status. They work full time and a few years ago bought a house. Parents never applied for BC. The child in question is 16 years old (in full education) and lived in the UK for 8 years.

I always believed that for children born abroad the only route to acquire BC is when one of the parents is applying with the child or already a BC and the other parent settled. However I came across this info and got confused:
Children with settlement and residence
We recognise that some parents may be settled and established in the UK but choose not to become British citizens for valid reasons, such as their own country’s attitude to dual nationality, or to avoid losing rights in their own country. We recognise that their child living in the UK may have nevertheless built up their own connections and still feel a sense of belonging and strong connection with the UK. We therefore do not think it will always be appropriate to expect such a child to have to wait until the age of 18 to apply to naturalise, if the child is an older minor and established in the UK.

You must normally register where:

- the child has completed a period of lawful residence in the UK of more than 5 years
- the child has been granted settled status in the UK, and held that status for at least 12 months (if an earlier application is made you must consider whether there are compelling grounds to overlook this expectation, taking into account the reasons for exercising discretion over time spent in the UK when subject to immigration time restrictions in the naturalisation guidance)
- the child’s parents have completed a period of 5 years residence and are settled in the UK
- the child is of good character
- where necessary both parents consent to the registration or any objections by the non-applying parent are ill founded
- there is no reason to refuse on character grounds
If a child does not meet all of the above criteria, you must consider in line with the guidance on all other minors below.

I understand the child would be registered under the section 3(1). I looked again on the other website and there it was clearly stated that the expectation is for one of the parents to already hold BC or they are applying for it together with the child - this is for the application to be successful.

Could you please clarify it for me please? Much appreciated!

[contorted_svy]

Parents don't need to apply for citizenship at the same time, but child needs to have ILR. Other members may be able to advise further.

[annad]

The child has got a settled status under the EU withdrawal agreement. The parents want to apply to register the child before he turns 18 but neither of the parents are planning on applying for BC themselves at the moment (maybe in a few years time).
I read the case workers guidance and there is a discrepancy. I pasted the paragraph above titled "Children with settlement and residence" when it says as I understand it - you can register a child with settled status even when neither of the parents are BC (they are both settled). Reading further on in the same document it says that under section 3(1) the expectation is for one parent to have BC, the other should be settled at the time of applying to register the child.
The country the parents are originally from doesn't forbid dual nationality so there is no excuse for not applying for BC - maybe this is important when trying to interpret guidance notes.