You can still take the connect, but you just have to get the express for free from T5 to T23 (I'm not fully sure how it all works yet, but it may be best to print yourself a free ticket to T23, exit the station then re-enter with your bank card / Oyster).
If you do this you'll pay a maximum of £10.70 for the whole day's travel (£12.50 if your first touch-in starts before 0927) - even though a single fare for the connect would be £10.10 or £10.20 - rather than buying an expensive express one-way ticket unless you already paid / you are really in a rush to get to an event near Paddington.
In itself, this doesn't mean that you should take the Heathrow connect. The cap for Z1-2 is £6.80. If you reach that cap, and take two tube journeys, 1) Heathrow to Earls Court touching in after 0927, and 2) Earls Court to Heathrow touching in before 1635 or after 1857 - you would only pay £6.80 + £1.50 + £1.50 = £9.80 for the day, certainly with a bank card, not sure if Oyster does that yet (I recall that if you start with a journey involving Z6, it may then just work towards the Z6 cap though to be sure you could always use 2 Oysters back when they were refundable at the LHR tube ticket office).
The express ticket was only about £3 more than a single connect ticket if i bought more than 30 days in advance. So i bought this to save the hassle of changing at T2-3.
This was of course bought before i thought of the daily cap. But i'll definetly remember it for next time, that's a good travel hack.