“there are fewer opportunities for foldable cycles to be converted into e-bikes using conversion kits, due to their specific shape, size and mechanical constraints.”
At least a partial answer is in the article for those who didn't bother to read it.
That makes some sense to me, I suspect a lot of e bike fires involve DIY kits and homebrewed, cobbled-together Franken-bikes. There's a lot of shady companies out there selling e bike parts and kits that I don't think are safe to begin with, and I don't particularly trust the average joe to fuck around with a big battery pack from a fly-by-night website.
And there are less conversion kits readily available for folding bikes, you can almost assume that a folding e bike probably came that way from the factory.
You can differentiate a folding bike from a regular one pretty easily at a glance. To determine if an e bike is stock or a conversation you'd probably need to have someone actually check out each e bike individually.
So in part, it's more of an end-run around banning DIY e bikes without needing to individually verify whether each bike is a conversion or not.
But I do have another thought on the matter.
I don't know what the trains are like in London, I've never been, but I can't imagine they're totally dissimilar from other trains that I have been on. Full-sized bikes are kind of unwieldy. They can block up aisles and get in the way. Folding bikes fold, so that's less of an issue. If there's a fire on the train, I wouldn't want to have to scramble around a bike in the aisle to get out, and if the fire is the bike that's even worse. Folding bikes are more compact, easier to get around, and if it comes to it, easier to pick up and throw off the train where a bigger bike might get kind of caught up on seats, poles, and other passengers as you try to pick it up and carry it to the door in a panic.
Not saying that this is necessarily the right move (nor the wrong one) just that I can understand how some bean counters, lawyers, and insurance companies could come up with this.