My advice is not relating to the dispute you have about the definition of how many people are counted in your household - I don't have enough knowledge of that aspect.
However, my advice is more practical. You say you've been told you "cannot bid" for these new 5 bed properties when they become available. Have you got that in writing and does it actually say the words you cannot bid ? My guess is it doesn't...
Therefore, while you have this dispute about the household definition which could go on for some time. If the properity becomes available you ABSOLUTELY need to bid for it. The worse case scenario is you don't get it. But then the Council will have to confirm in writing the reasons why.
Lets say you don't bid for it and then the Council turns round and eventually agrees with you about the household definition. Where will you be then? It's too late because you didn't bid for it. But once you bid for it, then the Council have to prove that you don't qualify for the property.
That gives alot more weight to your case. Otherwise it's simply a hyperthetical argument you're having with the Council saying "if I bid for this would I qualify for that etc". Rather than what it should be, which is you have actaully bid for a property you qualify for, let the Council prove this shouldn't give it your family.