This "rather curious arrangement" still applies by the way!
JSP 336 (3rd Edition) Volume 12 Part 3 Pamphlet 10
INSTRUCTIONS FOR THE WEARING OF THE INSIGNIA OF ORDERS, DECORATIONS AND MEDALS
9. Awarded Decoration or Medal not Received. A corresponding length of riband to that described at Paragraph 7 is to be worn in respect of any Decoration or Medal awarded but not received. Clearly this only applies on occasions when Medals are worn.