"Additionally, if a B2C user does sign up, as he isn't linked to an approved prospect he will be treated as a retail customer. (No B2B specific features are available when he logs in)."
The final part of your response is actually what we would desire to happen. If a prospect is approved, they are able to have the B2B specific features and catalog prices, but if a prospect is not approved, we would like them to still be able to purchase from the site. However, it seems trying to have a regular B2C user on a B2B site causes site bugs. We actually have a support ticket in now because of this, and the same can be replicated on the test adventure work site.