This is really a question about how the UK civil registration system works, because it is the system that leads to the end products (e.g. indexes, birth certificates). The system has developed to meet the legal requirements specified in various statutes like the Births and Deaths Registration Act 1953. I think the basic requirements have not changed substantially since the commencement of civil registration in 1837.
Each registration district had one or more sub-districts, each with a Registrar, who reported to the Superintendent Registrar for the district. So, several registers may have been in use at any one time in a district. Each quarter the Superintendent Registrar collated the registrations for his district, and sent copies to the Registrar General. The Superintendent Registrar was required to make an index for his district so that requests for Certified Copies of register entries (generally referred to as Certificates) could be serviced. The law did not specify the form of index, so each district developed thier own system.
The law also required the Registrar General to create an index of the centrally held registrations. This is the system now used by the General Register Office (GRO) and its predecessors. As it is based on the quarterly returns, it does not relate to the original, locally held records.
The UKBMD website is a portal to indexes of a small (currently)number of co-operating local registrars and far from complete. According to Users Guide to Birth Indexes for the West Midlands part of the website, the references given are the ones used by the registrars that relate to the original registers. However, this may not be the case in every registration district.
The question asked how local registrations should be cited. Using the form:
Creator. Title. Jurisdiction (sub-district, district). Year. Reference. (name - optional)
For a certificate from the local register office I suggest:
Sandwell Register Office. Birth Certificate. Tipton, [Dudley]. 1837. citing TIP/1/157. Adams, Edward J.
Compared to the citation for a certficate from the GRO for the same event:
General Register Office. Birth Certificate. [Tipton], Dudley. 1837 Dec Q. citing vol 18, p. 249. Adams, Edward J.