You are quite right about generalisations. The truth is that every area is slightly different, and the bus services grew up in response to those particular circumstances. The various areas of intense networks of Western/Southern National were quite tenuously connected, but then there were alot of green fields and sparsely populated areas between them too. Probably there was not enough trade for both modes of transport, and the railways were better at longer distance inter-urban. Within the areas of intense networks there were plenty of services that competed directly with the railway (Ilfracombe-Barnstaple-Bideford, Plymouth-Tavistock, St.Austell-Truro-Camborne-Penzance, Taunton-Chard, Plymouth-Callington etc) , but I guess that these were in more populated areas with substantial populations in between stations, and/or stations that were ill-sited or lines circuitous. It is not to be forgotten that if the 'National' shied away from these routes someone else would have stepped in. The same would apply to the propensity of rail to not serve local transport needs very well; once Road Motors appeared on the direct roads, the Helston and Kingsbridge branches, and the Par-Newquay-Chacewater loop [all requiring passengers to travel out of their way and change at wayside junctions to merely get to their nearest commercial centre] were doomed. There are many other examples.
Western/Southern National is not unusual in this - Eastern Counties Omnibus Co. route map had similar features, probably for much the same reason!