Propaganda.
The bombers were targeting central London, but had been harried all the way to the capital before meeting a further force of six 11 Group squadrons close to London. As the bombers prepared to bomb, and for once almost in time, the Duxford Wing also arrived. Bombs fell all over South and Central London (Beckenham, Westminster, Lambeth, Lewisham, Battersea, Camberwell, Crystal Palace, Clapham, Tooting and Wandsworth). If the bombers didn't panic, then they did something that looked a lot like it. The idea that they were targeting something as specific as Buckingham Palace is obviously ridiculous.
In the case of Ron's Dornier, it is almost certain that the pilot had left before Holmes collided with it, so it wasn't intentionally heading anywhere!
This and the subsequent afternoon raid that the Luftwaffe launched, were both resounding defeats for the Germans. It shattered the morale of some of the bomber units and is rightly remembered as Battle of Britain Day. On 7 September the British believed that they were losing, and were trying to lose as slowly as possible. With hindsight not afforded the men in charge or doing the fighting at the time, we can see that what we call the Battle of Britain was won today, 15 September 1940.