For the purposes of the Penalty Fares Regulations they absolutely do. If something is defined inside a given law, that takes precedence over other definitions (if not it takes the "man on the Clapham omnibus" definition). I have quoted in a post above the section of the Regulations that define what the word "valid" means for the purposes of those Regulations, and that includes it being for the correct route and time. Nor do the Regulations exempt a ticket valid other than those two things.
The NRCoT complicates the situation, certainly - it's one where paid legal advice would be prudent if being prosecuted on these grounds. But the Regulations absolutely DO say a PF can be charged in these cases.
I think that you're misunderstanding. The Regulations
aren't defining an offence, so you can't be prosecuted under them. The question of prosecution isn't really relevant at all to a Penalty Fare, unless it's the case that the Penalty Fare was neither paid nor appealed and is then withdrawn.
The Regulations are simply defining when the price is permitted to be different than usual for the purpose of the relevant TOC. The Conditions also define the same thing. And consumers are entitled to rely on the Conditions, the Regulations can't change if a ticket is valid or not. And a ticket may be valid under the Conditions but not the Regulations in any case.
If you use a ticket that's not valid at that time of day, but is otherwise valid, you could easily still be guilty of an offence if you had an opportunity to correct that at a ticket office and didn't take it. But you shouldn't be charged a Penalty Fare, only the difference in fares.