PbP apps are set up to match the parking conditions of the location, so when a session expires, extension is not allowed, one must set up a new session, but if there is a condition like "no return in <n> hours", it will not allow you to set up a new session until that 2 hours has expired.
I use RingGo up here in East Cheshire, and 10 minutes before expiry of the session, I get an email from Ringo telling me my session will soon expire; I can then extend the session. Doesn't your PbP app do the same ?
As for this PCN, I can't see any strong appeal argument on the contravention itself, but there may be a technical appeal based on Merton mismanagement of the enforcement process, so wait a bit to see if anything is offered, but don't miss the deadline for the discount, as I don't think this is anything that would win at London Tribunals.