Commentary on Sections Botc.
Subsection (2) provides that a person who becomes a British citizen under subsection (1) is a British citizen by descent for the purposes of the 1981 Act.
28.The conditions which must be fulfilled for conferral of British overseas territories citizenship are set out in subsection (3).
The first two are the same as for conferral of British citizenship under subsection (1):  see paragraph 27(a) and (b) above.  The third is that the person was not a BOTC immediately before commencement.
Subsection (4) deems a BOTC by virtue of subsection (3) a BOTC by descent for the purposes of the 1981 Act.