I have some sympathy for the bus driver here.
I understand what the law says, and of course people should move to make way for a wheelchair, if possible.
But it is one thing to make a law, and quite another thing to apply it in practice.
What is the bus driver supposed to do if the buggy user(s) do not co-operate and simply refuse to fold up their buggies?
It is easy to say "..stop the bus and refuse to drive further..", but this creates confrontation, and if you are a bus driver it is not pleasant to have to do this, perhaps multiple times in the course of one shift. I can therefore understand, if not excuse, the reluctance of some drivers to pick up wheelchair users.
What is the buggy user supposed to do if there is no room to safely store the buggy, once folded, and what is the bus driver supposed to do if allowing the wheelchair user to board would mean that the safe capacity of the bus is exceeded?
I don't think it is right that anyone should be asked to leave the bus in order to make room for a wheelchair user, and I think that TfL's terms and conditions specifically state that no-one already travelling will be asked to leave the bus. Sooner or later there will be probably be another court case, this time brought by a buggy user, who is asked to leave a bus after already having paid their fare.