Firstly, BDTCs did not exist in the 1970s, the status was created by the 1981 British Nationality Act which came into effect in 1983. Previously, they were CUKCs (Citizen of the United Kingdom & Colonies).
In the 1970s, a Hong Kong CUKC would have required a settlement visa to become a permanent resident in the UK. (The right of people from the British colonies to freely immigrate to the UK was removed by legislation in the 1960s.)
The settlement visa took the form of a special sticker affixed inside the passport, for presentation at a UK port of entry, whereupon the passport would then be stamped with Indefinite Leave to Remain. ILR constitutes 'settled status' - the person can live & work in the UK without any limititations. They can then renew their Hong Kong CUKC passport in the UK. A CUKC with a passport issued in the UK was entitled to right of abode in the UK.
After 1983, the status of CUKC was abolished and Hong Kong CUKCs became Hong Kong BDTCs (unless they had already acquired ROA in the UK, as UK CUKCs, in which case they became British Citizens.)
BDTCs had no automatic entitlement to ROA in the UK; to get ROA they would have to apply to become British Citizens by registration after 5 years continuous residence in the UK.
BDTCs who have settled status in the UK (ie. with ILR), but do not apply to become BC, stay as BDTCs with no ROA.
Unlike with CUKCs who got ROA when they have their passport issued in the UK, a BDTC passport issued in the UK got endorsed "Holder is entitled to readmission to the United Kingdom" - which is basically like RTL, ie. free to live & work without limitation but may be deportable. An important point to note here is that the 2-year rule does not apply to BDTCs with ILR whose passports are endorsed with "entitled to readmission"; they are entitled to be re-admitted to the UK for settlement as a permanent resident even if they have been absent for over 2 years. Ditto BNO, which replaced Hong Kong BDTC status post-97 (if it was applied for, as most Hong Kong BDTCs did).
A HK resident with a Hong Kong CoI would need to apply for and be granted a working visa to come to live & work in the UK in the 1970s. After 5 years legal residence, limitations would be cancelled and they have settled status in the UK (but not ROA). Their green Hong Kong CoI, when renewed in the UK, would be replaced by a brown UK-issued CoI. They can also apply to naturalise as a full British citizen (UK CUKC before 1983, or British Citizen after 1983).
If your parents had no limitations on their ability to live & work in the UK, ie. either ILR or ROA, and were living there, then legally they had settled status in the UK, whether or not they considered themselves to be "settled" abroad.