Run flat damage to tyre sidewalls

Ok, we have all seen tyres where the sidewalls show run flat damage BUT when is it a fail

had old 206 in with a tyre where you could clearly make out cords all round the tyre to inner and outer walls BUT still coloured black from the rubber . The cords were clearly visible but with a thin black rubber covering

I passed and strongly advised

What would the rest of you do !!!!!!!!!!!!!!!!