So in essence its an "at the passengers own risk" claim to the court
Well, you could say the same about any contractual right under the NRCoT or statutory right under the PRO or Consumer Rights Act, really.
it could result in very large costs for the passenger (Irrespective of whether the seeming interpretation of the law would point to the passenger winning)
Costs in terms of the time spent to bring a claim? Yes, sure, particularly if it goes to trial and/or if the passenger isn't experienced in Court procedures. But the risk of having significant costs awarded against you, if you lose, is minimal. The whole point of the Small Claims Track of the County Court (which any such claim would inevitably be allocated to) is that the recoverable costs are very limited.
They primarily comprise the Court fees (£35 for the claim issue and £27 if it proceeds to a hearing), direct costs for attending the trial (i.e. travel expenses and any time taken off work), and interest. Not exactly "very large", though I will accept even these relatively modest costs may be beyond some passengers' means.
This "is being used" raises alarm bells to me. If you do not start your journey (or it is a return where you have not set off from the destination) then is that ticket "being used"
I think any such argument would be a complete non-starter. The railway is perfectly happy to consider someone to be travelling, for the purposes of fares irregularities, once they attempt to pass through a barrier or enter a station - for example, by bringing (or threatening to bring) prosecutions for attempting to avoid payment of the fare (s.5(3)(a) RoRA).
In any event you aren't limited to bringing a claim under the NRCoT. You can always bring a claim under the PRO, which has no such "being used" proviso and creates a clear entitlement to alternative transport under Article 16(b) or 18(3) (depending on the circumstances).
This is true, hence the option to refund being ruled by the Ombudsman. The final clause is a non-clause
It's a reference to the right to refreshments for a 60+ mins delay, already established under the PRO. It is indeed couched in far more provisos than the other rights, but I have raised claims on this basis a few times.
A TOC once tried to claim that the inclusion of "may" (which is incorrect really, as the PRO
requires such refreshments to be provided if reasonably possible) means this right is was entirely at the TOC's discretion - and that they had chosen not to do so, so I couldn't claim back any expenses for obtaining my own refreshments! Needless to say, I gave that nonsensical take short shrift and the TOC didn't try and defend this in Court.