It looks from my reading of the BRE technical advice paper which provided the basis of the regulations that 'flash-over' fire was not seen to be an issue for external cladding. Therefore the fire rating requirements for external cladding were (are?) much less onerous for internal works.
Flash-over happens inside a room when the heat from a fire on one element (e.g. an old sofa) raises the room temperature to 1000C and then everything vapourises and the fire flashes over to fill the entire room. So what starts as a small bonfire suddenly becomes an inferno.
But a fire outside a building was thought not to behave like that since the heat does not remain trapped in a closed cell (a room).
But it looks in this case as if the flash-over within the room created a flame jet out of the window which then caused the edges of the cladding by the windows to effectively join in with the 'flash-over' and, combined with chimney effect due to the gap between cladding and outside wall - we all saw the results.
I'm sorry for the builders etc. They will be crucified because the Public has an unquenchable thirst for revenge. But the material choice was not their fault. If they had specified a better material than the minimum required in the Regulations, it would either have been 'value engineered' out or they would have lost their contract to another contractor who complied with the specification. It could perhaps be said to be a consequence of 'Quality Assurance'.
I'm sure Mike is correct - that material should not have been used there - but absolute reliability cannot be obtained without infinite expenditure, and there are plenty more compromises being made in designs. Also it looks like cladding regulations were not updated after previous bad experiences.
I agree with Mike - I wouldn't want it inside my garage walls. But outside? Maybe.