FYI I got bored and had a look myself. There’s nothing in them at all about cancelling if you SORN, so they can’t do that. I suspect they’ve got confused when you told them about the car being laid up, as they don’t do laid up policies at all.
I’m the first person to say that you should tell your insurer everything, but I wouldn’t dream (and never have) of telling mine if I was sorning the car for a bit.
Personally I’d look at simply reducing the mileage limit to the minimum they offer to reduce the cost, and then go with that. Or just carry on using it, it’s just a car after all and a modern one at that, it’ll be fine. How much was the policy overall, and are you paying monthly?