You are right. Infante Fernando's second wive was the only non-royal granted the title of Infanta of Spain. King Alfonso XIII created her on his silver jubelee as King of Spain (considered since he was sworn in when he came of age).
About the pragmatica, since 1978, art. 12 was considered no longer in force, because it is against the constitution. But art. 11 is still in force (except the clause depriving children of his father's surname). Only those marriages contracted against the King's (and the Cortes) permision are considered non-dynastic. After 1978, the King can refuse to give his consent to an unequal marriage (art 11 of the pragmatica), but not to give his consent and consider that marriage non-dynastic (art. 12).
He did not renounce his Bavarian rights until 1914, and that was because of Spain's neutral status, albeit inclined to the Franco-British alliance. He did renounce his previous citizenship on his marriage, as did his brother in law Prince Carlo of Bourbon-Sicily. This was because at the time a wife usually took her husband's citizenship, there was no concept then of dual citizenship, and the status of anyone in line to the throne had to be unambiguous. Infante don Fernando married for a second time after the death of his wife, who like her older sister had always been in poor health. His second wife, whom he married on 1 October 1914, born Maria Luisa de Silva y Fernández de Henestrosa, was created Duquesa de Talavera de la Reina, on 25 September 2014, as the marriage was dynastic (and considered unequal in Bavaria as well). It became clear later that this marriage would not produce issue, and so in 1927 she was given the title of Infanta of Spain. I believe she is the only non-royal to have received this title - the Ducal title passed to a cousin after her death (Spanish nobiliary succession law permits the succession of someone within six degrees of the grantee of a title) and is presently held by D. Alvaro de Silva y Mazorra, who succeeded in 1990. The children of the Infante Fernando de Baviera's first marriage were all accorded the title of Infante/Infanta de gracia; his second son left issue by a non-dynastic marriage, his older daughter married Prince Irakly Bagration and the status of the issue is not entirely clear - the Count of Barcelona in the list he gave me of Spanish dynasts did not include the Bagrations, but Infante Fernando had inquired of Grand Duke Wladimir who had confirmed that the Bagrations were a former reigning dynasty. Fernando, therefore, considered the marriage to be equal, and the Count of Barcelona at the time made no pronouncement on the matter. In any case, the two children born of this marriage (of whom only Princess Maria Bagration is still alive) both married unequally, before 1978 - this date is important because for reasons that are slightly obscure the effects of the Pragmatic decree of Charles III on marriages were considered no longer valid after that constitution (in an opinion of the Consejo de Estado).
He was not created Infante in 1914, but in 1905, when he married Infanta Maria Teresa. Actually, he was created after the marriage was announced. So he married as Infante of Spain.
https://www.boe.es/datos/pdfs/BOE//1905/295/A00277-00277.pdf
Before being an Infante of Spain, he was not a member of the Spanish Royal Family. Only the King, Queen, Prince of Asturias and Infantes were considered members of the SRF. A special status had children of Infante Alfonso of Bavaria and Infante Carlos of Borbon (children of his second marriage).
Was this royal (a male-line great-grandson of King Ludwig I) always regarded as a SPANISH PRINCE, from the beginning? The reason for my asking is my understanding that Spain has always honored a person's maternal (as well as paternal) heritage (look at the custom of a child inheriting both his father's and mother's surnames). He was, after all, a grandson of Queen Isabel II (in addition to being a nephew of King Alfonso XII, first cousin and later brother-in-law of King Alfonso XIII).
Of course, being a Spanish prince is not (technically speaking) the same thing as being an Infante of Spain: that didn't happen until 1914, when he was formally created into one. By then, he had moved to and settled permanently in the homeland of his wife (Infanta Maria Teresa): I believe he became naturalized as a citizen, after a period of residency. If nothing else, he renounced his Bavarian royal title and succession rights to the kingdom (not that he ever had much of a chance of inheriting it, anyway).
Given that he was an *equally* born prince of royal blood, and husband of a wife with succession rights, his status would have been comparable to that of Archduke Lorenz of Austria (who was declared a prince of Belgium in 1995, four years after his wife and children were inserted into the Belgian royal succession).
That being said, I'm still wondering if -- given the technical difference -- he was (from the beginning) regarded as a Spanish prince, and member of the royal house of Bourbon in Spain. I suppose the question would apply to his younger siblings (Prince Adalbert and Princess Pilar of Bavaria) as well, despite the fact that neither relocated to their mother's home country.
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