In London, I have never worked in a school which banned home languages in the classroom.
I have taught many, many Muslim students, most of whom are bilingual. They have spoken Bengali (heritage from Bangladesh) Urdu, Punjabi, (Pakistan) Farsi (Iran, also known as Persian) Dari and Pashtu (Afghanistan) Arabic ( Yemen, Oman, Saudi, Morocco, Algeria with French too, Egypt Sudan, Indonesian etc)
Being bilingual is a way of using parts of the brain which we often neglect, which support problem solving. It opens doors socially, economically and links people to their cultures.
However, I disagree with not allowing younger children to use a majority home language like English at all at school while they are learning Welsh, although I understand the principle of total emmersion. If you can’t express your feelings, articulate your needs etc yet in Welsh or any other school language, you may have quite a difficult time. And I don’t think anyone should be punished for speaking. Surely encouragement and reward is a better approach?
In classrooms, the teacher should be in control of what languages are used, be it Welsh in Wales or English in somewhere as multi-lingual as London. Sometimes it is very useful to allow students who are more recent arrivals to discuss lesson content in home language with each other to develop their understanding of the topic but that is a teachers call.
However, I agree that the playground is a bit different.