Sorry, forgot to answer one point:

So what about the following example. I live between Woodford and South
Woodford, and feel like a trip round the Circle Line. So I touch in at
Woodford, travel into London and go once round the Circle, then back
out to South Woodford, where I touch out and walk home. Assuming the
time limit for the journey doesn't get in the way, I pay only the
Woodford to South Woodford fare. Is this fare evasion?

It's a bit of a contrived example...

Perhaps, but I was considering a similar, "real" case (though only on
a theoretical basis) on the day of the Shoreditch last run. (Though I
didn't go in the end.)