Surely both are possible? As the tunnels are halfway to Camberwell
already, it makes sense to go there, so you could have Elephant -
Walworth - Camberwell - Denmark Hill - Peckham Rye - Nunhead - Brockley
- Lewisham, then all stations to Hayes.

That would probably be a pretty overcrowded branch, and any problems
that may come from trying to create more lines on the Denmark
Hill-Lewisham axis (which is partly in a cutting, I believe).

What's more, the obvious route for the Bakerloo to take to Lewisham
would be down the Old Kent Road, which must be one of the most busiest
bus corridors in the city, with stops at Elephant-Bricklayer's
Arms-Canal Bridge-Surrey Canal Road-New Cross-St John's-Lewisham.