Criterion is presumably using the HD master that they created in 2008 from a 35mm print, so they'll be at least a generation removed from the neg, but the (again, presumably) superior telecine should be ample compensation.
Criterion's transfer "was made from an interpositive
(IP) off of the original camera negative, which exists at Technicolor in Rome."
Still, as you said, a generation removed. Did BFI actually scan the cut negative? Is that done frequently?
That's not really true here as there are plenty of people on here who have the freedom to purchase and play either or both releases.
To the vast majority of their customers, is it largely irrelevant? Provided the release is of a reasonable standard, then sure.
I'd have to agree with mfunk that it is largely irrelevant to the vast majority of Criterion's customers. I think the key is "on here." This forum is a gathering of informed film lovers and home theater enthusiasts who are aware of the possibility of ordering films from other countries and who frequently have the equipment and means to order these discs. Most dvd consumers, even Criterion buyers, aren't aware that such a thing is even possible. I doubt Criterion spends much time thinking about what MoC, the BFI, and other international distributors are doing because it only slightly affects the portion of their customer base (5-10% at most?) that posts on this and similar forums. I would imagine that Criterion still sells most of its non-institutional product at Best Buy, Barnes and Noble, and other chain and local video outlets. For most people, that's just how you buy movies. I'm pretty sure that 90% of Best Buy customers (and employees) aren't even aware of the existence of the United Kingdom.