He gave fiery chase to the German plane, and shot it down. While wounded. And while his own body was engulfed in flame (we really feel can't mention that part enough).
Only when he saw the German fighter crashing to the ground did Nicolson (who was now also on fire) have the presence of mind to bail out of his plane (on fire) and jump (on fire).
As he floated to the ground, the British ground forces took a look at him and reasoned that this flaming sky-creature could only be some kind of Nazi hellbeast. So they opened fire on him.
Then the commander spilled his coffee, so really the whole thing was a total disaster.
But he made it to the ground alive, somehow, where he was extinguished by the suitably embarrassed ground troops. Nicolson realized that the day's collection of wounds had been increased by some pretty serious burns and a couple of friendly fire bullet holes, and also holy shit the glass of his wrist watch had actually melted in the intense heat. Did any of this matter? Hell no, he had just shot down a German!
Nicolson shrugged away his various life-threatening injuries in less than a year and was right back in the action in the fall of 1941, one Victoria Cross and a hell of a lot of bragging rights richer.