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Happyjew quoted this errata in another thread:

IG FAQ wrote:Page 31 – Regimental Advisors, Look Out – Arghh!
Change this entry to: “Whilst a Bodyguard is alive, the owning
player automatically passes their Look Out Sir! rolls for this
unit but any wounding hits diverted in this fashion must be
allocated to a Bodyguard”.

Look Out Sir! allocates to the closest model. If the Bodyguard is not the closest model, can you still Look Out ... Arghh!?
If you can - would a Bodyguard be allocated the wound regardless of distance? Regarding the recent FAQ with respect to range - what if the Bodyguard is out of range of the firing unit's weapons?

I believe so. It seems the wording for Look Out - Arghh overrides the normal re-allocation process.

Well, specific trumps general and codex trumps BRB and all that... it does say that you must allocate the wounds to the bodyguard, so it would override the rule saying you can't allocate to people too far away.... right?

I concur. It would skip over other models to the closest bodyguard. LOS can normally allocate out of range, so that's not an issue, but I think the bodyguard would still need to be within 6" of the LoAing model.