"It is only used for competition purposes" requires no clarification, and none is given. Your refusal to ever admit you were mistaken is tiresome. I'm done.
I too, had that same interpretation as you when I first read the WHS bumf last year that the 95% would only apply to formal organised club competition rounds
only.
I realised, with increased reading and research, communication on forums with people who had already gained more knowledge than me, that any one sentence read on its own did not necessarily mean an absolute truth at that time. I changed my view due to advice from
@Swango1980 and others like him who have been well ahead of me in understanding since Nov last year.
Establishing the facts from the first drafts of WHS info was a tricky business. Their info appeared sketchy at times.
I think I understand why that was - although this has taken some time for me to realise.
The early WHS info had to keep to the submitting of scores and the adjustment of handicaps and not venture into club competitions in too much depth. That area was to be governed by different regional and national organisations with some scope for autonomy at county and club level. Hence when it came to playing handicaps and allowances the word "recommended" was used. When England Golf adopted the Rules of Handicapping this was changed to "mandatory".
I never think that I have perfect knowledge and I certainly do not have perfect knowledge of the Rules Of Handicapping as adopted by England Golf.
But when I am unsure about something, I do my best to find out facts, read further, consult others etc.
Cherry picking single sentences from the advice and guidance that has been changing, increasing and adapting is probably not helpful as anyone can then come back with more cherry-picked sentences - as I did to your annoyance. And for that, as I am guilty of cherry-picking, I apologise to you and everyone here.
People with differing views will tend to find each other tiresome - not much I can do about that I'm afraid.
My interpretation of "competition purposes" includes social, casual, informal golf and this is why "playing with and against others" has been included in the Rules of Handicapping.
But I could be wrong.
It would appear odd that two people in a club competition, could have different handicaps in that club competition than if they chose to play against each other on the same day on the same course in the same format, but not in the club competition where the field was the same size in both groups. Never used to happen before and I don't see why it should happen now.