The basic issue is that there are two conflicting terms here.
When the railcard was purchased, as part of its terms, a time restriction on its use was agreed.
When the contract for the journey was formed, the railway - in the full knowledge that the use of the railcard formed an essential part of the contract - explicitly stated there was no time restriction applicable to the contract.
Those two are in conflict.
Later, the railway decided the railcard term took precedence over the statement explicitly incorporated into the contract for travel at the time it was formed. Personally I think it's more likely that it's the other way around, and the information presented at the time the contract for travel was formed takes precedence. It would have been trivial for the railway to mention the additional time restriction had it wished for that term still to apply but it chose not to do so which, I would suggest, renders it unenforceable. Further, the railway is attempting to extract a penalty for failing to adhere to a term that it itself did not consider of sufficient importance to mention at the time the contract was formed.
But regardless, merely the difference in fare should have been requested in line with NRCoT 9.5.1. PFs aren't supposed to cover breaches of general fare time restrictions - perhaps 'no ticket' was selected because there was no suitable category to use because it shouldn't have been a PF!