We always did this sort of stuff when we were kids. My father always said anything sticking out of the window was dangerous, and if we didn't listen, he would stop the car until we did.
However, if British law is only that children under 12 or 135 cms need to be in a booster seat, there are plenty of under 12s, especially girls, who would be well past that height limit. Many girls reach their adult height between 12-14, so may easily be 140 cms at 11. I've met boys who were well past that at 11 or 12, too.
It's easy enough to stick arms out of the window with a normal seatbelt, and even heads if you slip the shoulder strap off.
OP, you can have all the rules you want for your own car, but you can't tell your DD or grandchildren what to do in their car.