8 USC 1409 Children born out of wedlock
Notwithstanding the provision of subsection (a) of this section, a person born, after December 23, 1952, outside the United States and out of wedlock shall be held to have acquired at birth the nationality status of his mother, if the mother had the nationality of the United States at the time of such persons birth, and if the mother had previously been physically present in the United States or one of its outlying possessions for a continuous period of one year.
British law does not matter.
As a national, but not a citizen, he'd not be eligible to be a Senator, let alone President.
British law matters if they are making the argument that his British citizenship disqualifies him even if born on US soil.
one further point....you are getting hung up on the word national. They are using it to mean citizen. You can see this on US State Dept websites and well as in the seminal US Supreme Court decision listed on my profile that discusses this very law.