Hi railer,
Yes, contactless looks at the touches for the whole journey and compares them to the available fares. It ignores any interchanges which aren’t programmed as alternative fares. As there is only one fare between the pair of stations, that is what will be charged.
Oyster, on the other hand, charges the fare for the journey so far at any touch out. When you touch back in again it restarts the journey, but it won’t refund anything already charged. If it’s an undiscounted adult Oyster card then the back office will queue a refund to be picked up from the next day, but this is yet to be implimented for discounts or zip cards etc.