A bit of a mess by the looks of it then. Railcard holders will continue to need to purchase paper tickets. I hope advertising at the station makes it very clear that contactless might not be the cheapest way.
In many cases off peak travel will be cheaper with paper tickets, especially at weekends where Super Off Peak tickets are available.
Although I'm generally in favour of extending Oyster/contactless I have a real fear that this is going to result in a huge price increase for off peak travellers vis the back door. This has already happened at Epsom, as I understand it.
It made off peak travel more expensive for people in London as well (capped on the basis people only want to travel into central London) but they got rid of the cheap paper tickets so people had no choice.
From a train operator perspective, one of the primary attractions of the TfL fare structure on commuter routes is the opportunity to charge peak fares in the evening peak and the removal of break of journey.
Biting the bullet and removing the paper fare structure on some of the routes which have already seen extension of Oyster might focus the minds of travellers when they see fares go up.