How is this still happening? We discovered this in Canada in the 1970's. Except in our case, the Urea Formaldehyde foam was giving off formaldehyde gas.
In the UK, the construction industry has a great many cowboys, incompetents and scam artists. There's a lot of demand, so the market doesn't force these people out of business. And the courts can't do much if it turns out the guy gave you a fake name and address - or if the company that did the work went bankrupt.
And we've long had governments that take a hands-off, laissez-faire attitude - expecting the market to sort things out. As they see it, this insulation can be done properly, building owners chose to buy it, why ban a promising new green technology when the UK has millions of under-insulated homes and an energy price crisis?
Similarly, the UK has a load of tower blocks clad in flammable insulation after vendors Kingspan and Celotex scammed their way through fire safety testing - but somehow all the people who made money off it have disappeared and the taxpayer has to pay to remediate it.