
Unfortunately I don't think they have accepted it, only that this cannot be done *yet*. They still don't seem to understand the fundamental contradiction of a _secure_ end-to-end encrypted service, and one that can be scanned if necessary (but of course only by the good guys).
From a BBC article on the "U-turn": The Internet Watch Foundation - which finds, flags, and removes images and videos of child sexual abuse from the web said that in its opinion it was already technically feasible to scan encrypted messaging systems while preserving privacy. It said: "We know technologies exist, now, which can do this - with no more invasion of privacy than a virus guard or spam filter".
So because they can find images on the web, they've just made some wild leap that the same can be done for E2E encryption; after all, it's all just the interweb-thingy, isn't it?
The BBC article goes on to quote: "... [the Bill] will enable Ofcom to direct companies to either use, or make best efforts to develop or source, technology to identify and remove illegal child sexual abuse content - which we know can be developed," said a government spokesperson.
So although they've conceded this cannot be forced this time around - they really still do not understand how fundamentally flawed/stupid what they're asking is :-(