Hi,
I'm an FLR (M) applicant (USC) who needed to request my spouse/sponsor's passport (UKC) back a few months ago. I used that Return of Documents request form, sent via email, and got back the UK passport within a week. You won't receive any confirmation from the UKBA so it can be a bit of a scary wait (up to 20 working days).
Just be sure that you put NO in big letters to the question "Are you withdrawing your application?" at the top, and include a covering letter/email that states very clearly that you only want the UK sponsor passport, NOT the applicant's passport, and you do NOT want to withdraw your application under any circumstances. I didn't give any explanation why we needed it, just requested it and made sure it was clear that I didn't want to take any action which would withdraw the application.
Also, the letter/email has to be sent from the document owner. I sent it at first and got an email back saying that my husband (UK passport owner) needs to be the one making the request.
Edited to add:
That warning scared the bejeezus out of me as well - I don't quite know what they meant by it, but I think PickledSakura also used the form successfully in the last couple of months.