According to http://www.immd.gov.hk/ehtml/topical_7.htm , any resident British citizen (i.e. those British Citizens with Right to Land, previously (before 1981) known as British Belongers) was automatically stripped of Right to Land and converted to having Uncondtional Stay status.
Leaving Hong Kong with Unconditional Stay (UO in this case, instead of RO), requires one to return to Hong Kong within 12 months or that status is lost. Once lost, you are just the same as any other foreigner subject to visas and conditions of stays, etc.
The reason resident British citizens got Right to Land / Belonger status was because they could not naturalize as BDTCs. So they could not get ROA period, but after 7 years they could get ROL.
I guess, before 1 July 1997, Right to Land was given to British citizens / BDTCs with ROA in places other than Hong Kong in lieu of being naturalized as BDTCs with ROA in Hong Kong. And Right to Land could not be stripped or taken, anymore than ROA could be. After then, Right to Land was stripped from all holders and became a status exclusive to former Right of Abode holders. So technically the first ROL holders after 1 July 1997 couldn't appear until 2 Feb 1999 (18 months after 1 July 1998), when the transitional provisions for retaining ROA by returning to Hong Kong to settle expired.
So on 1 July 1997, all those resident British citizens still in Hong Kong got UC and then could apply for ROA based on their 7 years residence in Hong Kong. Those who left Hong Kong before that date also got UC but had to return within 12 months. Then they'd have to meet the requirements to apply for ROA.
Note that UC was granted automatically, but ROA was not - it had to be formally applied for by the applicant.
Any resident British citizen who failed to return by 1 July 1998 lost their UC and now has to apply from immigration the same as any other foreign national.
Here is some discussion from LegCo on why resident British citizens couldn't be granted ROA automatically, but were given UC instead: http://www.legco.gov.hk/yr96-97/engl...s/bc600306.htm
Some more stuff from LegCo on removing privileges from British and Commonwealth citizens: http://www.legco.gov.hk/yr97-98/engl...s/bc631603.htm