The current heat dumps are proportional to reactor heat.
This is incorrect. It should be proportional to reactor overheat + reactor current output - reactor current demand
The moment you start drawing off heat with thrust, the panels should work less hard.
Basically when the computer is trying to slow down the reactor, that is when the heat should be getting dumped. If the computer is trying to speed up the reactor, the heat dumps should be turned off immediately.
For instance in the Titan, if I have a reasonable (not overspecced) reactor, if I press shift the heat dumps should retract immediately as the reactor starts producing less heat than I am using.
To this reactor overheat term you need to add a small amount of heat dumping as the "cold side" of the auxiliary generator cooling. The turbines dump reactant mass to space, so they don't need a cold side. But the Aux generators run in a loop so they need a way to cool the coolant to create low pressure prior to reintroducing it to the reactor core.