They're not outlawed, it's just that (in theory) you'd need to put on another ("UK") sticker on the back somewhere if you take the car onto the Continent. The GB plate will just be a decoration but no-one says you'd have to take it off.
Historic car rallying is well under way again all over Europe and I've not heard from any British competitors that they've been stopped for having the wrong stickers/plates, nor do I expect it will happen. (They'd have to catch them first, and those 4.5 Bentleys and Talbot 105s can shift).