Let me see if I can clarify this.
If Dave has a cuddy with porta-potti, the MP has traditionally overlooked these types of craft as houseboats on the waters mentioned previously.
However, in the case of Squam and the other lakes mentioned, local health officials along with regular law enforcement are empowered to enforce this RSA.
Dave said he has a "head" and "sleeping berths". I took that description as meaning those features are permanent in nature. If so, then there is no gray area, Dave's boat is specifically prohibited from the aforementioned waterways.
Hope this clears it up a little....