My mistake – conflicting hard coded posts_per_page in the query and “Blog pages show at most” in the Reading settings were confusing it. WordPress was supplying enough pages to cater for the Reading settings value of 18 per page and wp-pagenavi was rendering enough links for the posts_per_page value in the query.
On the default theme the last page listed in the pagination is page 36 so there is no possibility of going further and getting a 404. There should be further pages though as there are more posts available.
If we work with a smaller category the numbers are more manageable:
http://www.keepturningleft.co.uk/category/sailing-around-britain/ktl-0-solent-to-blackwater/ – here pages 1 and 2 work, but 3 doesn’t. There are 36 posts in total in that category so there should be 3 pages exactly at 12 posts per page. Using the TwentyFourteen theme only two pages are displayed by the pagination.