BuddyPress.org

If you remove that function and filter, you cannot set the activity stream as frontpage.

if that is not an issue for you, then go ahead and remove the filter:
remove_filter( 'page_template', 'bp_dtheme_page_on_front_template' );

The problem probably has something to do with the empty $wp_query->post->ID.

The DAP team should either remove the filter and create a compatibility filter or change how it looks for the empty post ID.