I've tried both approaches. Some palaces are one topic only. Others have been reused >5 times. With the reused palaces, with intention you can sequential recall just that topic. It's the same as having a party at your house. You don't confuse what happened at the party versus what happened when you were just cleaning your flat.
With "random access" memory within a multi-use palaces, then, there is a little mixing. Sometimes you are thinking about a topic, the mind "goes" to the appropriate palace and then you recall maybe all the various unrelated topics, but your mind focuses on what matters. In the mixing, topics take a mythological feeling because the characters within them are involved in so many stories. Like fables or comic books.
Augustine of Hippo (later Saint Augustine) from 354 AD:
And I come to the fields and spacious palaces of my memory, where are the treasures of innumerable images, brought into it from things of all sorts perceived by the senses. … When I enter there, I require what I will to be brought forth, and something instantly comes; others must be longer sought after, which are fetched, as it were, out of some inner receptacle; others rush out in troops, and while one thing is desired and required, they start forth, as who should say, “Is it perchance I?” These I drive away with the hand of my heart, from the face of my remembrance; until what I wish for be unveiled, and appear in sight, out of its secret place. Other things come up readily, in unbroken order, as they are called for; those in front making way for the following; and as they make way, they are hidden from sight, ready to come when I will. All which takes place when I repeat a thing by heart.