You are quite correct that it is guidance, however there are sections that indicate law that they are mandated to follow. One important section is 12.6 that indicates very firmly that they should first consider things from your perspective and not from the point of view as an objector. Having any blanket policy to deny is not permitted.
12.6 Good reason” should be neither confined to need nor equated with desire. Most firearm certificate holders possess firearms for reasons of their profession, sport, collectors or recreation, and may properly wish to exercise discretion as to what types of firearms they choose for these purposes. On the other hand, a simple wish to own a particular sort of firearm is not in itself “good reason” without further supporting evidence of intentions. Chief officers should be mindful of case law (Anderson v Neilans (1940) and Joy v Chief Constable of Dumfries and Galloway (1966)) which suggests that the chief officer should consider the application firstly “from the standpoint of the applicant rather than from that of a possible objector”. “Good reason” will need to be demonstrated for each firearm to be held under section 1 of the 1968 Act