The case above is what I would consider to be a very grey area, which we as an organization have not yet fully come to grips with. Notwithstanding CDS direction, I'm think the law of unintended consequences is very much at play here. I wonder how it would be looked at if the individual concerned were playing in a civilian league (with all appropriate paperwork completed and fully explaining that this activity was part of his exercise prescription)?
On a more generic note, intramural sports teams are "clubs" within the PSP structure and as such are bound by normal club rules which restrict the number of reservists (as well as retirees and/or DND civilians) that can participate. It's a percentage of the total membership. Some activities are obviously restricted in the total number of members they can have (e.g. a hockey program will have a maximum number of participants because the amount of ice time available is finite). The rules also state that regular force members have first crack at the available spots. If the program can be filled with regular force members, then no reservists can participate. I give the example of the CFSU(O) hockey leagues. They are currently restricted to regular force and full time reservists, but there are also waiting lists to get in from the regular and full-time reserve communities. If the priority applicants have to sit on a waiting list, there is simply no room for the Class A crowd.
In general, Class A personnel are not prohibited from participating in base clubs and intramural sports activities, but in some cases, they are too far down the pecking order to be allowed to participate simply because the folks higher up in the order fill all the spots. I suspect that this is what has happened here.