Yeah, Pts are priced (*pretty much), like cash, according to whatever AA thinks they can get from the point to point route. Independent pricing of origin-final destination based on supply/demand of that origin-destination pair, is well within normal capitalistic economies.
So, they think they can get/ask for 298K pts for someone going to London. When it comes to USA-LHR, AA is king, they can ask for a higher price. They think they can get/ask for 55K points for the EU destination (Routing through LHR doesn't matter for setting this price). It's much more competitive, and AA is willing to take the 55K points off their obligations instead of seeing you go to delta or UA.
Mile redemptions are a little different than cash though, because they are also in competition with their own cash fares. A lot of times, domestically at least, cash fares go down on weekends and pts go way up on weekends. And around holidays, the cash fares may be as much as twice as high, but the mileage fares can go from 80K points flying the weekend after Thanksgiving to 8K points flying on Tuesday instead. They really know how to demand high mile prices during times that people are more likely to use miles and when they are more likely to be able to fill seats with cash paying customers. When you see low mileage awards to Europe, they are often on less than ideal routes that are not going to be that competitive on selling for cash. I've had two 'good redemptions' to Europe in the last few years, and they were both objectively pretty shtty flight schedules.
(* the star here is to point out to the 'partner awards' and stuff. That LHR-EU leg is often (always?) on BA, and I usually either see it for 57K pts or more often than not, just plain not available at all).