It isn't bullshit. It always needs at least a 3rd coat to get the same finish as other brands, and some darker colours will need a 4th. Also, the Estate Emulsion doesn't touch up, with the newly repaired patches being very obvious even when the original paint job was only a month before (I was once witness to this on a massive scale, that resulted in most of a building needing a full repainting of the walls. The paint was all from the same batch, so that couldn't be blamed either. There were a lot of unhappy people on that job!). I will use F&B, both personally and professionally, but ensure customers know there is a price difference beyond just the basic £/litre and why, so they can decide if it's worth it.
There are a few brands across trades that have greater labour costs attached to them, and I can understand why someone outside construction may not know it or think 'bullshit', but a good tradesperson will be happy to explain why there's a difference. The other example that springs to mind is Ikea kitchens - they have no void, making fitting around services much harder and time consuming. I won't fit them as it isn't worth the headache to me (I'm originally a carpenter by trade, but I also decorate for existing clients), and any savings on the kitchen are more than swallowed on the installation. The few chippies I know who will, charge an awful lot more to reflect the extra work and still curse them.
OP, I'm always happy for the customer to supply the paint. I look at it as one less trip to the shops for me! I'd prefer this was discussed at the point of quoting, as I will have put some effort into checking the most up-to-date prices for the brand and finish, but I would just deduct that portion of the quote (which wouldn't necessarily equal what you end up paying directly). I don't 'make' on materials, but will round up slightly for ease of quoting (£63.89 would be oddly specific, so would become £65) and sometimes I add labour & petrol if the selected supplier is going to be more than a quick detour and short stop, although that is unlikely for paint.
I suspect the decorator has only quoted for basic paint brands, as your overall quote seems low for that many rooms including what sounds like stripping paper too, so buying the paint yourself may be more of a case of ensuring it's exactly the ones you want rather than saving any money. The swatch cards only have a selection of the most popular colours available, but the full range is available from the decorators' merchant, so no problems there.