Oh goodie, another route that officially has two forks but no signs for either of them (see also TH218). Indeed, it looks like it is only signed from TH41 and nowhere else.
I'd throw my head at the desk but this is about typical for Iceland, routes don't get signed well or at all in urbanized areas.
Anyway I think I'm going to map it up to the "T" (actually a roundabout) and not map either of the forks after that since there are no signs for either.