My understanding is that only ranks above and including Sqn Ldr could be used by individuals who had left the service
Some people got temp ranks (war substantive) above there official ranks and reverted to original last official rank on war ending or completion of service = this is recognition that they held a higher rank at some point and thus could use it for various reasons post war including what you list
So Flt Lt John Doe may have been Sqn Ldr (war subs) or even Temp Sqn Ldr John Doe and reverted back to Flt Lt
and when he retired or relinquished would have been a Flt Lt but was permitted to use the Rank Sqn Ldr on his calling cards etc
Occasionally I think on retirement some people were actually also given an official higher rank
I expect someone here will correct me..