I wholly agree with your last point, that it would be prudent to give the operators the opportunity to consider the situation at an appropriate level. In fact, this opportunity should always be given, whatever the dispute.
I regret that, and I do so with some hesitation, I will have to disagree with the assumption of your legal advisor. Not only has the Trade Descriptions Act been effectively repealled (and replaced by the CPUTR), but it is far from clear that the terms of travel on Edinburgh Trams can be considered as an offer of goods or services to Consumers. I have been in no doubt about this, and the Scottish jurisdiction is immaterial in this exemption. The only elements of rail and tram travel which are captured by consumer legislation relates to advertiseing, special promotons and offers, areas which do not apply to the acceptance or otherwise of Concessionary travel cards.
Nevertheless, the City's own Trading Standards Officers should be interested in the apparent error, as should the Advertising Standards Authority (though I wouldn't expect any productive outcome from notifying the ASA).
Additionally, you must understand that this is not a 'fine' in the terms that you use the phrase. It is a 'standard fare' and represents no penalty nor presumtion of error of action or intention on your part.
I do realise that Scotland has little need for lawyers with expertise in public transport legislation and case law, but I am a little concerned that your advisor appears to have been hasty in offering the advice you have reported on here. Sorry to appear contradictory.