Hammerman has correctly identified the key practical problems but I can't see how it could be illegal, per se, to have a combined bathroom and bedroom. This is because there's no statutory definition of what a bedroom is. (It's just a space which the householder can choose to use as a bedroom, a dining room, an office, or whatever). So there can't be any legislation which defines rules specifically for bedrooms.
Of course, there's legislation which (among other things) prohibits the installation of normal electric sockets in a bathroom (which gives rise to the problems outlined by Hammerman) but, if you can live without these sockets, there doesn't seem to be any reason why it couldn't be done.
I used to live in a 2-up/2-down terraced house, where one of the fairly large bedrooms had been converted to a bathroom. The bath, w.c. and sink only took up a fairly small amount of space and I can't see how anyone could have objected if I'd decided to move my bed in there to free up some space in the remaining bedroom.
Chris