Expired UK Passport?

What! Let these people back in. These people probably are too thick to renew their passports - so the changes are to ensure that they stay in Spain.
yes. For the sake of Fundamental Human Rights principles I would accept this minor problem.

Spain's Gain, in this case
 
What! Let these people back in. These people probably are too thick to renew their passports - so the changes are to ensure that they stay in Spain.
These thick people, me being one, at least have freedom of movement, unlike the intelligent lot in the UK that knew best.
 
How does the UK know we have left?
The same way it knows you arrived! The carrier tells them Fr J H with UK passport number GB123456789 is booked on flight EZY123. Their confirmation that it was actually Fr J H and not someone else pretending to be you is weak in the outbound direction. But why do you think they care? We operated for centuries with no idea at all.
 
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