I've already posted this, but, this question was asked in my licencing course and the answer was that if a licencing officer decides that 'any reasonable person' would believe the person looked under 25, and therefore in line with the conditions of the licence (using a challenge policy) by not asking them for ID you have broken a mandatory condition of the alcohol licence - so they can tell you you're wrong, and further more, tell the DPS that they can no longer authorise you to sell alcohol on their behalf because you're not fulfilling the conditions of the alcohol licence.
You're absolutely right that it's complete bollocks and it's massively unfair because as you rightly say, it's based on someone's opinion, but the opinion of the licencing/police officer overrides mine. So yes, they can tell me I got it wrong. It's not a legal process with a hearing, I don't have a right to a defence, if the DPS wants to keep the licence then they do as they're told.
So no, it's not breaking the law, I won't go to prison, but the licence can be affected and cause the DPS a headache as well as possibly not be allowed to serve alcohol any more - not really conducive to keeping a job is it? Causing that?
Another example would be serving someone who's drunk, my version of drunk may differ to yours, and if you're a police officer and decide the person I've just served more alcohol to is drunk, even though I don't, your opinion overrides mine, because you're a police officer and I'm supposed to sell alcohol responsibly and serving someone who's drunk isn't doing that.
You don't even have to break the actual conditions of an alcohol licence to have one removed either (again, posted this upthread so apologies for repeating myself!) But a few years ago a DPS fairly local to me posted memes and jokes that were derogatory towards women and around domestic violence, a complaint was made and the licence team removed his alcohol licence - because he wasn't deemed as a fit or responsible person to sell alcohol.
*A DPS (designated premises supervisor) is overall, responsible for the alcohol licence, they then authorise the sale of alcohol by named people to the public - and they must ensure that the named people are sticking to the terms of the licence (which obviously includes the law around it).