Part (or all) of the problem seems to derive from no one with authority in the Palace actually knowing what they are about when it comes to foreign titles, in particular, they have too often seemed unaware of Sophia Naturalisation Act (SNA), under which ALL of the Electress Sophia's Protestant descendants were deemed to be British Subjects. Notwithstanding the effects of these provisions on the status of most of the Protestant rulers of Europe by the nineteenth century, successive British Government refused to recognise Sir James Brooke as Rajah of Sarawak because they argued that:

a) British Subjects could not renounce their allegiance to the Crown, and
b) a British Subject could not be the ruler of a foreign country.

Clearly, item b was rendered untrue by the SNA. (The British Government finally recognised him in 1862 - the US Government had recognised him in 1849.)

Clearly, also, neither the Palace nor the then Government were aware of the implications of the SNA for Prince Philip of Greece and Denmark, who was born and remained a British subject and whose Princely titles were clearly recognised until he purported to renounce them. Similarly, in the 1950s, Prince Ernst of Hannover successfully resorted to the British Courts to establish that he was a British Citizen by birth.

I therefore doubt that anyone in the Palace has considered the anomalous position of recognising a British subject outside of the Royal Family as a Prince, or officially recognising his use of the title, Aga Khan, much less according him the honorific of HH.

I have never understood why the mood changed so much that the warrant of 1932 was considered either desirable or necessary. So many of the foreign titles were historically important (in British history) such as the Dukedom of Bronte (even if it was stolen by the first Duke's agnates). Finally, I have always thought that The Queen's extreme reluctance to allow the Stanisław Radziwill's to attend her banquet under their princely titles to have been particularly mean spirited.