What are they going to do if they don't like it? Try to issue a UPFN?

Just appeal it, write to First Group, Passenger Focus, and if you like, the media.
There's nothing to say there is a minimum value on the ticket.
Oh, and that woman at First who reckons a ticket issued between 00:00 and 02:00 is issued for the previous day is WRONG.
The 01:39 from York (for example) is a "peak" train for tickets issued on that day. If you buy before midnight, then you can use an off-peak.
So she's hardly an authoritative source of information!