The Home Office refuse migrant parents of British children (Zambrano carers) for settlement under the EU Settlement Scheme (Appendix EU) for the following reasons:
Some Zambrano carers are refused under Appendix EU of the UK's immigration rules because they currently have leave to remain under Appendix FM of the immigration rules. Appendix EU was brought into law by Parliament. Before Brexit, a Zambrano carer could have a right of residence under the EU rules and leave to remain under the UK's immigration rules. The only likely reason for this new rule is to deny as many Zambrano carers settlement as possible.
Other Zambrano carers are refused under Appendix EU because they never applied to Appendix FM.
A third category of Zambrano carers had leave to remain under Appendix FM (valid for 2.5 years), and allowed that leave to expire in order to qualify for settlement under Appendix EU. They are refused anyway.
The Home Office tell the British public that the average time to process an application to the EU Settlement Scheme is 72 hours and can be completed online. Zambrano carers wait up to 1.5 years and can only submit a paper application. The Home Office sometimes refuse to send the paper application to Zambrano carers.
The Home Office excluded Zambrano carers from the equalities assessment of the EU Settlement Scheme. The assessment only covers EU, other European Economic Area and Swiss citizens resident in the UK and their family members. See https://www.gov.uk/government/publications/eu-settlement-scheme-policy-equality-statement/policy-equality-statement-eu-settlement-scheme
Appendix FM versus Appendix EU: What's the difference?
Appendix FM can take up to 10 years to obtain permanent residence. Appendix EU takes just five years.
People with settlement under Appendix EU can leave the UK for up to five years and remain a resident. Under Appendix FM, you can only be gone for two years.
Appendix FM was created in order for the UK to comply with Article 8 of the European Convention of Human Rights (ECHR) - the right to family life. The UK government is reconsidering its commitments to both the Human Rights Act and the European Convention on Human Rights. If the UK leaves the Council of Europe, which oversees the ECHR, the UK could stop following Article 8 and end Appendix FM.