The setter of the TOC specific fare has been very clever. They operate ticket machines at one end of the route which list their fares at the top of the screen, they are the cheapest yet run less than 20% of the journey options with no direct services. In my view their practices bring the industry into disrepute, and other than profits all they achieve is to cause problems for the staff on the ground.
Yes, that's been done on one the routes I work too. I went and had a look as we were suddenly getting masses of them coming through and its not made clear on the TVMs that the ticket is hugely restricted. On one of the routes 1 train an hour out of 8 or 9 for a journey of 1 stop, that in my opinion is not what those tickets should be used for and causes no end of problems and revenue losses/bad pr for other companies and adds huge complications to passengers on what should be an easy local journey into town. At an estimate 75%+ of pax with those tickets genuinely believe they have valid tickets as its a train ticket from x to y as far as theyre concerned.
Going back to the discretion point, it has almost got to the point in a way of it being a free for all, passengers get accepted once and then push the boundaries further and further and blatantly take the mickey. Then a guard decides enough is enough says no, they get reported for doing their job and has a 'chat' with the manager and the passenger gets some vouchers to say sorry. What is the point in rules at all now that all the TOCs are so concerned about the Satisfaction scores that pretty much anything goes seems to be their preferred course of action making it impossible for front line staff to enforce any rules properly.