Corrected entry: It makes no sense for Clay-Face to fake like he lost control of his abilities in order to fake his death when he's close to killing Batman.
Corrected entry: Unless he didn't feel like it or Daggett's being held somewhere that's secret there's no reason that Clayface, who faked his death, couldn't try to track him down again.
Correction: There's absolutely nothing in the episode that suggests Clayface can't try to track down Daggett again. That's pure conjecture on your part. And conjecture is not a mistake or plot hole. But just to humor you, as seen in the series, Clayface goes through many other trials and tribulations that take up his time, which might explain why they don't show him going after Daggett in future episodes. Either way... this isn't a plot hole.
Correction: Clayface wasn't faking losing control of his abilities. He really was losing control. When Clayface saw all the characters he played over the years as Matt Hagen, he began turning into each of them involuntarily but, because there was too many of them, he became overwhelmed and couldn't stop transforming. He even begs Batman to shut off the screens. Https://www.youtube.com/watch?v=K4W8Wp6SzdM.