I think you mean interest rate is applied to?
The point of this loop hole is that if I lent you £10 and told you the APR is 5% and then you incur additional fee's which bump the APR up, the original agreement which you signed stating you would pay 5% APR is inaccurate.
Yes the T&C's can advise you of the different fee's but it doesnt go onto say 'this will change the APR from x to y' as its impossible to forsee what will happen in the future.