Tried searching for an answer to this, but didn’t find anything.

I don’t have any immediate plans to do this, but out of curiosity, is it permitted to transit a third country airport like LHR or IST to go from one Schengen airport, like FRA, to another, like ATH or LIS?

I typically travel in the US and Asia, so I’m not as familiar with cabotage policies in Europe. My gut would tell me this is disallowed; it would seemingly allow loopholes related to things like VAT refunds, or cause issues for people with single entry Schengen visas.

But BA lets brings up itineraries for ATH-LHR-LIS, as an example, so maybe it’s not prohibited?