Because it is an FAA recommendation, not a rule. Lufthansa decided that they only do ILS at night and NorCal was not in a position to give them that in the near future because it would disrupt the flow of airplanes that could visual approaches at night and require less separation.
I am not 100% sure about the following but I think ATC instructions trumps company rules any day.
Understood, but I don’t think that makes Lufthansa the asshole here.
Between Lufthansa seemingly unaware of this situation in NorCal, and the ATC being prickly about it (the indefinite holding when they clearly had no intention of slotting them in), there’s plenty of assholes being assholes.
I am not 100% sure about the following but I think ATC instructions trumps company rules any day.