I've had London numbers quoted to me in all three ways over the phone recently.
020 xxxx xxxx, 020x xxx xxxx and even (rarely) 020xx xxx xxx.I live in the 01782 area. To speak to someone in that area, I dial XXXXXX. Someone in the 02088 area would dial XXXXXX to speak to someone in that number set. To talk to someone in the 02087 number set, they dial the whole number, the way I would dial 01785XXXXXX to speak to someone in that area, who may be physically closer to me than two
0208xxxxxxxx series numbers are to each other. As you say, it's a choice that BT made. Personally, I think it's not a sensible choice. It appears that, not for the first time, I am alone in this.