That's a good point about the regulation given the low quality, I suppose if it was a problem they'd already have gone after public SDRs capturing the broadcast bands.

It doesn't sound like the sort of thing Ofcom would go for as I suspect it'd be seen as making unnecessary work for them, but you never know. Someone there clearly likes Radio Caroline (despite Ofcom's predecessors having fought to close it for decades in its pirate days) because they got awarded a 1 kW and later 4 kW power limit when AM community stations are usually much lower, so there might be sympathy towards the idea of more community AM generally. It would be a difficult thing to lobby for politically I think because it's such a niche interest, but it'd be an easy thing for them to do and there's not much else that part of the spectrum can be used for easily.