"I know that BMD indexes indicate where the event was REGISTERED and NOT necessarily where they took place..."

The GRO index shows the district where an was registered, but a birth HAD to be registered in the district in which it took place (i.e. not necessarily where the family was living).

However, in this case, we can use http://www.lancashirebmd.org.uk/index.php (a transcription of the local registrar's index, as opposed to the GRO one) to establish that the Herbert LOWE birth in Wigan in 1887 was not your chap, as the mother's maiden name is shown as WEBSTER. A birth of a Herbert LOWE in 1886 shows a mother's maiden name as DAVIS (sic) and this is probably more likely. Here is the matching GRO reference:

Births Jun 1886
LOWE Herbert Blackburn 8e 395

Hope this helps

Caroline