Breaker is the wrong size
The core problem is #14 wire on 20A breakers - you have to address that!
Extending the circuit with #12 does not fix the problem! You must deal with the #14/20A problem.
The only feasible answer is to replace the relevant 20A breaker(s) with 15A breaker(s). And this opens up another can of worms:
All the breakers need to be replaced anyway.
The "Challenger" breakers are known fire-starters and must be eliminated with the ferocity one would use on an FPE panel. The good news is, with Challenger, there's nothing wrong with the basic bones of the panel, so you only need to change the breakers.
And in even better news, the proper breaker is super easy to come by, since all BRyant/Eaton "BR" breakers are also Type C, the correct type for your panel. This is approved by UL, and fully documented.
Better news still, Eaton BR breakers are cheap - $5 a trip typically.
So you're talking under $100 to replace all the faulty breakers with the correct BR duplex breakers, either 15/15, 15/20 or 20/20 as the wires require. And you'll be able to take care of all the overbreakering wire problems at the same time.
You also need to replace the Siemens/Murray MHT breaker in lower left - that was never legal or safe in this panel. Someone went "Challenger is obsolete, I'll just use whatever" because they didn't know the above.
The main breaker is also of the Challenger type deemed a firestarter. Swapping that is more complicated. The power company will have to turn off power at the meter. Consult with the local Eaton dealer for the correct breaker for this; note the bolt-down feature which is required. I would expect a BR2100, and $40ish.