The policy is a good one. Buy everything you need that was in your checked bags and once the bag is returned to you send a copy of all the receipts back to BA and they will reimburse.

It is a very quick and painless process and there is no in depth audit of what you have purchased. As long as you are reasonable and can back up why you needed to purchase something then you'll be fine. But certainly don't let the fact that a bag has been lost disrupt your trip and certainly do use it as an excuse for some worry free shopping.