I am just guessing here, but I can imagine that (at least in germany) the public utility companies (or someone like that) would be required by law to supply you with water, electricity, landline and internet, access to a street, etc. Basically: if you are allowed to live in a house, you have rights that the authorities supply your basic need. I think its reasonable that therefore, the gov can decide what zone is usable for living and which is not.

As I understand from other comments there is no "real" bathroom in this house. There might be certain rules of which "features" a space has to offer to be considered a valid place to live in.

I think both sides here are understandable. There is the gov, which has to make some regulations in order to be able to fulfill its duties and to enforce some lower bound for whats considered a place to live in. On the other side, there is a lot of people who cannot or dont want to afford this lower bound and would be happy to be able to live in something that offers less.

Basically, the government doesn't want shantytowns, and large numbers of people living in sheds in yards is what that is.

Thats a TL;DR version of what I was trying to say, yes. Thank you!

Ah makes total sense. Thank you very much for your comment.

Allotments and similar systems are often meant to provide space for people to grow food or just do hobbyist gardening. If you were allowed to build and live on them legally the people meant to use them would be competing with home land prices. It's basically zoning or declaring a park.