Companies generally follow the law on currencies. So a London bank won't take yuan because the Chinese government says it can't. Your black market traders will take it, but they might...screw you over since you can hardly call the police on them.
I doubt it's that simple. Does that Chinese currency law have any force in the UK?
I'm by no means knowledgeable about this, but I'd imagine it's more like any bank that offers yuan accounts in the UK would necessarily need to be able to do business in China to make the accounts useful, subjecting it to Chinese law. Since the Chinese government forbids the latter, the former is loses its appeal. So a London bank could take yuan if it had no Chinese presence, but it wouldn't want to.
When I spend a Dollar, the business that gets it puts it in a bank account. That Dollar can (theoretically) be taken to the issuing bank, in this case the Fed, by the business' bank, in order to get something of value.
To enforce the trading of Yuan, the Chinese we do not value Yuan held by in foreign accounts (or in the case of the "international" Yuan, it's value is restricted). So now those pieces of paper you have with Chinese lettering (or that account valued in Yuan) has nobody that gives it value... it's worthless.
What the regulation does, is to protect against attack on the currency on the open market, like 1997 SE Asia one. Obviously Chinese are currently holding an opinion, that this protection is currently worth more than uncontrolled investment.
For the same reason BNP Paribas paid the record 9 bil USD fine to US, even though it is a French bank.