Maybe, just maybe, Raymond, Sarah and David literally changed their mind once the wheels of production were in motion? Maybe they abandoned the idea of a food restaurant and decided instead to use the show's franchise as a promotional piece for a new Cocktail Bar venture they are going to start up, sponsoring it out of the license fee purse?
I can see how that might seem appealing (MPs and bankers have shown worse public contempt). I can't see the BBC agreeing to a cocktail bar show being based on The Restaurant myself, but who knows?
Bottom line: I just can't think of why else the three arbiters abandoned their good judgement demonstrated in series 1 & 2, throwing apparent good sense out of the window, deciding instead that "can't cook", smarm and BS were more important qualities than cookery skills, warmth and passion for a job well done.