This provision applied to only dual nationals-—it is not applicable if deprivation would result in a person's statelessness.
From 28 July 2004, English (or Welsh or Scottish Gaelic) language requirements for naturalisation applicants were increased: From 1 November 2005, all new applicants for naturalisation as a British citizen must (unless exempted) prove they have passed the Life in the United Kingdom test.
Neither the language nor Life in the UK test requirements apply to those seeking registration (as opposed to naturalisation) as a British citizen.
Note that passing the test is also required for anyone wishing to remain indefinitely in the UK, whether or not they apply for citizenship.
[1] Such child must also meet character requirements, pay relevant processing fees and attend a citizenship ceremony.