Something is not right about this story. Taking each point:
We'll overlook the photo of a train that hasn't been used on Gatwick for about 7 years, I suppose at least it wasn't a loco hauled set in Swallow livery
Signalling error - that seems fair enough as all four lines appeared to be open so there was no need to send it via the slow.
Normally "route it back on to the fast". Well if it the driver stopped and queried the route at Balham (which in the context he would not really need to do as early morning trains on Sundays particularly are often switched around), then the signaller could have returned the signal to danger and waited two minutes to clear the route for the fast instead. If the driver had taken the route on to the slow line, routing back to the fast would not be possible anyway until East Croydon, as there are no more crossovers until then.
If the "tracks were blocked between Selhurst and East Croydon by engineering works" then NO trains would be able to reach East Croydon from Selhurst anyway! It appears that the FAST lines were blocked between these points so all trains were being routed Fast to Slow and vice versa at Selhurst Junction.
Another train preventing the Gatwick reversing? Well there is no way a train WOULD be "reversed" if the down slow was open, it would just be sent that way anyway, as it was still able to get to East Croydon that way and had to cross at Selhurst junction anyway.
Trying to find out why it did not reverse at Streatham? Well Streatham is on a different line for one thing, if they meant Streatham Common, as we've established, there are no more crossovers to the fast until East Croydon so this would not have been possible. A wrong direction along the multiple signal sections from Streatham Common to Balham is not going to happen in this sort of case.
Clearly something went wrong - there are three clear hefty delays, I'm guessing one before Balham querying the route, one at Selhurst watching trains on the fast line which may have triggered the alarms, then the usual waiting at Windmill Bridge while half a dozen Thameslinks passed.
Going by RTT, if it is accurate, it seems to me that it would have been quicker to accept the route down the slow as there didn't seem to be much in the way at that time of day.
Clearly the passengers have every right to be annoyed and some sort of compensation is in order.
However the newspaper appears to have cobbled a report out of some tweets and some misunderstandings about engineering works and how railways work. When did The Independent become so tabloid?