Convinced this is perfectly legal

I'm not legally qualified, but am convinced this is perfectly lawful. You have bought a piece of software. Whatever anyone says, the transaction is a sale just as much as the purchase of a book or chisel or CD is a sale. The seller wants to restrict what you do with it after you have bought it. I don't believe any UK court is going to uphold this.

In the first place its going to fall foul of consumer protection legislation which restricts what conditions you can impose in cases where the balance of power between consumer and supplier is heavily in favour of the company - which in this case it is.

Second, you have not consented to the restrictions, nor had them made clear to you, before purchase of the product.

Third, post-sale restrictions on use which do not originate from public interest concerns are not generally enforceable. If its a matter of forbidding any but the supplier to refill a certain kind of fuel tank, and there is a genuine health and safety issue, it will probably be enforceable. If its just XYZ saying you shall not play this CD on players made by ABC, no way.

Basically, they have sold you a copy. What you do with it is up to you. They have not sold you 'the software' any more than a bookseller has sold you 'the book'. What they have sold you is one copy. If you want to read this copy in the bath, that's up to you.