I think the most likely train my wife will take is the 0721. I'm just a little worried as "local" off peak is usually 0930. I'm assuming she can't get the 0705 as it is advertised to arrive in London before 1005, even if she doesn't catch it that far.
Common sense would say it's fine, but strictly speaking the ticket terms bar the train because it gets to London before 1005. Obviously a Northern train that does not go to London has no such restriction so is fine.
The off peak restriction for local tickets is not relevant for this ticket. The only restrictions that are applicable are for the ticket held. If anyone questions the validity simply ask them to look it up on their Avantix machine.
A way round it is simple:
Keighley - Peterborough Off Peak £57.50 (any train)
Peterborough - London Off Peak £62.50 (valid into London at or after 1005)
Total = £120. But the train must call at Peterborough. This allows an earlier train into Peterborough but from Peterborough you have to get one that gets into KGX at or after 1005