[British Columbia, Canada] Recently found out Landlord can't request security deposit.

My landlord requested damage deposit at the beginning of tenancy, $425. I was recently informed by the government and other resources that it is illegal for the landlord to request damage deposit IF you are living with them and sharing kitchen/bathroom, which I am.

These are very shady landlords, hence why i'm trying to move out. They have kept people damage deposit that apparently they can't even request! I was thinking of paying half the months rent next month ($850). Could he do anything against me if i do that?

I've been looking n looking everywhere for the answer but I can't find any. I found the link for the tenancy act - https://www.canlii.org/en/bc/laws/stat/sbc-2002-c-78/latest/sbc-2002-c-78.html and under What this Act does not apply to it states it.

Any help is insanely appreciated as this is really bothering me. Thanks.