Valid routes are basically via Haywards Heath to any of the London Terminals then Underground to KXSP and FCC to Kentish Town, or Underground all the way from your London Terminal to Kentish Town, or by Underground from Balham, Vauxhall*, Brixton, West Brompton onwards to Kentish Town via either way above.
I don't think it would be valid for any break of journey on the Underground, if it's a point-to-point, but you can break your journey on any National Rail services at any point on any valid route.
It is of course valid on the direct Thameslink route as well, and I think when this is closed overnight and the Underground is also closed it would be valid on the bus services between St Pancras and London Bridge.
* Vauxhall is classed as a London Terminal, not entirely sure why - perhaps a hangover from Nine Elms!
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Maybe because you can travel direct if its not weekends or late nights :?
That's not the reason - I suspect it's just bad programming or encoding.