According to the OP, there was no "technical fault" located and the cancellation was presumably precautionary because no such fault could be located. Here are two examples, both of which are speculative exactly because we do not have facts and exactly why OP ought to go through at least one more round of fact-gathering with BA:

1. Clearly there was a smell of fuel. This dictates the precaution of off-loading the aircraft and determining whether there was an going danger to the aircraft which would preclude it from flying safely. But, no such danger was apparent and thus the flight was cancelled, presumably because a lengthy review of every system was likely in order. Perhaps the ground HVAC sucked in some random fumes? Perhaps nothing was wrong? Who knows. But, safety comes first and the incident means a careful review. Perhaps after that review, no "technical fault" was ever found.

I would hope that any sensible person, even one of the EU nannies, looking at this situation would not penalize a carrier for being too cautious.

2. There are stations where the fuel concession is the airport authorities. Eg., the bowsers are not contracted to BA. If there were a leak from a bowser, that is not only the fault of the airport authority, but not the fault of BA, which doesn't bear any more responsibility here than it does if you slip and break your ankle walking to the gate due to a failure of the airport authority.

As to the hotel and so on, no employee has the authority to vary either EC 261/2004 or the COC. It becomes a "he says / she says" as well. However, I do believe, given BA's general willingness to pay reasonable knock-on expenses, e.g. a taxi when a delay means missing the last train and so on, that if the claim was made under EC 261/2004, it was denied under EC 261/2004.