I don't see there's any mileage in making a complaint to London Travelwatch about the ridiculous delay compensation policy that TfL have on their rail services. The only compensation they must offer, for as long as TfL Rail and London Overground remain part of the National Rail network and apply the NRCoT, is 50% of the relevant portion of the ticket for 60+ minute delays. Whether they choose to have a policy of offering compenastion beyond that, is sometjing entirely within TfL's discretion.
However, the facts are that TfL have chosen to promise compensation (they confusingly call it a refund) of 100% of the fare paid for journeys within the London PAYG area, if you are delayed by 30+ minutes on a TfL Rail/LO service. But they limit this to causes "within our control".
Signalling failure is most definitely within their control - after all, signalling is an inherent part of the safe and normal operation of the railway, and they pay Network Rail for access to the tracks, which includes the requisite operation of the signalling.
Sothe operation of the signalling is something they have, from the viewpoint of the consumer, decided to outsource to a third party - no different to how the operation of the trains and stations themselves (in terms of staff) is outsourced to private companies like Arriva and MTR, and how the manufacture and maintenance of the trains is outsourced to Bombardier and so on.
No-one could credibly suggest that a failure to have sufficient serviceable trains to operate the service would be something outside of TfL's control, despite it being something they are not literally themselves doing (having outsourced it). Neither would it be credible to say it's outside their control if they don't have enough drivers. A signalling failure is no different. The fact that there's a monopoly on tracks and signalling is neither here nor there - it's an outsourced part of the operation!
It's rather rich for TfL to take this approach in any case, as they (or their contracted operator) will be handsomely compensated by Network Rail for a signalling failure such as this. Of course TfL may well disagree with paying the owed compensation in this case, but then of course they would. After all, they're the ones potentially losing the ability to profit over your misery, and they're currently quite tight up financially.
Given we are talking about a Twyford to Paddington journey, the relevant portion of the fare is likely to be rather greater than for a Zone 1 Underground journey. So I wouldn't think it necessarily disproportionate to consider the option of Court action if they continue to refuse what they owe.