If people cannot cope with the supposed complexity of the concept of London Terminals, surely it would be a better solution to scrap it altogether and force people to buy a ticket to a named station?
It's simply a problem because people can misunderstand the meaning, or what stations are terminals.
I regard them as a station where a train terminates, which is pretty much the case for all but the exceptions through the core (and Old Street). As such, I can see why people might think of Euston, Liverpool St, King's Cross as a terminal station and possibly that you can come into London via one and travel on to another.
Totally wrong, yes, but I can still see why people might think so (and TOCs seem to put London Terminals up on the front screen of TVMs that can lead people to not realise that there's a page 2 or a A-Z search to find more tickets).
It works fine for lines that can split and end at different parts of town, but TL is a weird exception, especially where the fares are the same. Joe Public doesn't care about how the revenue is shared out, but FCC clearly like it as they must make a fair bit. There were posters up at Farringdon when I used to work there, but I am not sure how passengers are otherwise told before they get there. The posters always made me think that you'd just go to the excess window and pay the difference (which in this case appears to be £0)!
In the case of my parents, they stopped short of their London Terminal (Liverpool Street) to take the tube to Euston. They were stopped (presumably the gate rejected their ticket), but allowed through. Normally, an attempt to transfer to another terminal would be an issue on a bus or tube. Farringdon is the exception because you've come to a station that is beyond your validity and you're still on a service that has penalty fares in operation - thus no £0 excess.
It's one of the rules that is there for revenue purposes, and if people were aware and bought the right ticket then the revenue splitting would work fine. In the few cases where people got it wrong, it's where discretion can be shown as one loss of a few pence isn't massive - and most passengers wouldn't buy the wrong ticket again. There's no obvious gain by buying the wrong ticket, and no intent to defraud. It's where I believe the penalty fare system falls down.
Perhaps details should be taken and a check of the passenger details should be made like when issuing a PF and if there's no previous record for that person, they're let off. Second time, they've been told and made aware of what a London Terminal is and how it's defined and you give the PF.