Thank you very much for explaining the decree and the legalization of the Infanta's title.
Was the official title of Prince Elias hereditary? The royal decree is here:
http://boe.es/datos/pdfs/BOE//1920/234/A00704-00704.pdf
Vengo en reconocer la nacionalidad española a D. Elías Roberto Carlos de Borbón de Parma, con la facultad de user en estos Reinos el título de Príncipe de Borbón, con el tratamiento de Alteza Real.
You are correct, and my post was poorly worded, as the royal family never recognized Gonzalo as a Royal Highness and Franco indeed never created him a Royal Highness in a decree. However, I have read that he was accorded the style of Royal Highness in his Spanish passport until 1987.
Alfonso XIII recognized the nationality to Elías and gave him the permission to use the title and the Style. As the title was not given to him ad personam and the decree did not said that neither their spouses nor their children shall be so entitled, it was able to be used by his family members and also recognized the nationality to them.
I never read about the Style given to Gonzalo in his spanish pasaport, but its weird because hi was never considered part of the Royal family or part of the kings family (familia del rey). And he was never considered RoyaI highness in Spain. I had read that Alfonso, Gonzalo and Luis Alfonso had that Style in their french passports, not in spanish ones. Only Alfonso was Royal Highness in Spain.
The decree was made to recognized the titles and to stop some titles and Styles used from some family members of the King, that were not recognized by Don Juan or Alfonso XIII. For example:
1-the use of the title of infanta and RH style from Emmanuella de Dampierre, she was never recognized an infanta and RH, she only had the permission of Alfonso XIII to use the title of duchess of Segovia.
2-The titles and styles that Alfonso and Gonzalo used of Princes of Borbón and RH, they never had recognized any title from Alfonso XIII and Don Juan and for the SRF that titles were fantasy titles. Only when Francisco Franco recognized Alfonso duke of Cádiz and RH the SRF recognized him as a Royal.
3-The titles and styles used by Carlos Hugo de Borbón-Parma and his family in their pretense to the spanish crown of the Carlist branch. Carlos Hugo Style his self as Prince of Asturias during the Francos régime, and for the SRF the only Prince of Asturias is the heir to the trone and that time was JC as his father Don Juan was the Chief of the SRH and "King un exile".