What does them not doing penalty fares mean?
You used the term “a penalty fare of any sort” and Avanti don‘t issue penalty fares.
They do report people for potential prosecution but that’s totally irrelevant here.
No, Avanti since Covid have made all their trains “reservation only” but then provide reservation-free seats, it’s a bodge. Tomorrow I will be using one of their trains on a day return without a reservation. It’s not an issue. But it causes problems with booking sites which need a reservation and won’t issue a ticket if no reservation is available. I buy my ticket at the station when I want to travel. It sounds like you’ll be in the same situation.
Most people here think that what Avanti (and LNER) do stinks, we’re not defending it. They don’t want people with season tickets or ‘open’ tickets (such as day return tickets) using their trains, they get more money from advance tickets because they don’t share the revenue with other operators.