The UK is pretty good at maintaining proportionality between regulation and what's being regulated. Given the nature of housing stock in the UK, it's unlikely that four people in an HMO will be overcrowded, but accommodating more people often requires alterations to the house.

Not sure I totally agree. You can still have say two unrelated people sharing a room (x2). So for example a 1 bed flat with 2 people in the living room and 2 people in the bedroom; or a Studio flat with all 4 people in one room. I see where it comes from though, and I guess including them in the definition but not licensing allows them to magically decide to licence 3-4 HMOs on very short notice.