Actually *everybody's* a bit wrong, including the skeptical IO. Somehow these things, which are actually straight-forward, get all mish-mashed and people get more confused then they need to be.
So some facts are in order. As stated in the Immigration Act 1971, holders of ILE enter and leave the UK under the interpretations set forth in HC395 Paragraphs 18 and 19. I suggest people read it if they are affected by it.
In a nutshell, it says that permanent residency the UK is forfeit if the person is out of the UK for more than 2 years in one stretch. That includes holders of either ILR and ILE.
For a person who has been issued ILE from a foreign post, Paragraph 18 says that unless it is used within 2 years, it will become invalid. That is what the IO had apparently mish-mashed when she said it had to be renewed every 2 years.
If an ILE is not used within 2 years, it actually will expire. Obviously the 2 year clock stops ticking when the person is in the UK.
When the holder of ILE enters the UK, the visa functions as ILR. This is simply a matter of terminology. However, when ILE is issued abroad it is given an explicit expiration date which is linked to the expiration date of the applicant's passport. This is how the nc73's 10 year expiration date got mish-mashed.
nc73's comment about taking the KOL as a visitor is fine. This is doable.
Again, read the appropriate rules governing the admittance of residents. They are very clear.
Hope that helps...