If your committee is waiving the requirements of item (iii) then it is effectively rewriting and undermining your by-law. Therefore permission given through that avenue may not be valid.
Your owners corp should insist at a general meeting that the floors permitted under the waiver be checked. You should then have a serious discussion about the committee’s operation and whether that by-law is fit for purpose or need to be rewritten.
The owners given the waiver should be told that the flooring installation may be in breach of the by-law and therefore subject to challenge if there is ever any noise problem.
Committee members tend to be indemnified against making mistakes as long as they are acting ingood faith. If the owner did want to pursue them for compensation, they’d have to prove that they knew the effect of the by-laws but decided to ignore it. Even then, it could easily revert back to the owners corp, but that’s assuming the owner had a case at all. And it would have to go through a local court, rather than NCAT, which has no provision that I know of for claiming damages for bad decisions, especially those made to benefit the owner making the claim.