Are you saying that you've seen cars driving along in a relatively clear inside lane being stopped because they didn't move out to pass a slower moving car in the middle lane?
I'm no talking about a car that undertakes (enters the inside land only to pass a car in the outside lane).
Purple, I think you are missing the point here. Overtaking a car on the left is illegal unless you are driving in slow moving traffic. It doesn't matter if you entered Lane 1 or were already in Lane 1 to overtake on the left.
The law does not state you can pass a slower moving car on the left, it clearly states:
Overtake only on the right, unless traffic is travelling in slow moving queues and the traffic queue on your right is travelling more slowly than you are. If you intend to move from a slower lane to a faster lane, adjust your speed first.