And no, it's not stupid that wheelchair always trumps buggy in the damn WHEELCHAIR SPACE.
Well, I wouldn't say it's "stupid", but it's not the legal position. The following is from the Supreme Court's judgment in Paulley:
47. As to an absolute rule, it is true that there is nothing in the primary or secondary legislation which supports the notion that the space allocated for wheelchair-users is to be exclusively used by such individuals, although it is clear that that was, in general terms at any rate, the primarily envisaged use. ...
48. ... once one considers the effect of an absolute rule in relation to the use of spaces on buses, it is not difficult to conceive of circumstances in which it could be unreasonable to expect a non-wheelchair user to vacate a space and, even more, to get off the bus even though the space is needed by a wheelchair user. As Lewison LJ said (perhaps somewhat optimistically in some cases) in para 48 of his judgment, “[a]lmost by definition, a person who refuses to vacate the wheelchair space when asked to do so [to accommodate a wheelchair-user] will have a reason which (at least to them) seems to be a reasonable one”. Thus, it might be reasonable for a person to refuse to vacate the space, if he or she was disabled and needed the space to store disability aids, or was elderly and infirm, or was accompanying infants, especially, for instance, if that person had an urgent hospital appointment, or would find it physically very difficult to alight from the bus. Or the space might be occupied by a vulnerable person who only felt safe in the space and could not reasonably be required to leave the bus in an unfamiliar or unsafe location. Of course, in some of these types of circumstances, it might be possible for the non-wheelchair user to move elsewhere on the bus, but that may be impossible in some cases, or it may only be possible if third parties, not occupying the space, alighted from the bus, which may be unacceptably difficult or even impossible to arrange.
Anyway, it sounds like the OP and a wheelchair user can occupy the space at the same time, so there should not be any problems in theory. I think that the real problems would arise if the OP and another buggy user are in the space, the OP reasonably says that she cannot move because of her DS's autism, and the other passenger is a dick and says "Well if she's not folding her buggy then I don't see why I should have to!". But hopefully with the right communications with the bus company such a situation can be prevented.
And as a general rule I of course would agree that morally able-bodied people should give up their space in the wheelchair area even if it means disembarking and catching another bus, regardless of the legal position.