Okay, I found some more information about the Iron Horse Trail.
The railroad right of way that compromises the trail was
abandoned in 1977. It was not rail banked. Two counties purchased the right of way in 1986 and promptly converted it into a trail. There is no evidence that they intended to restore rail service.
I also found an article that mentioned that, much more recently, BART was considering the right of way for enhanced service. Presumably in response to this inquiry, in 2019 the State of California passed a law that said this specifically about the Iron Horse Trail:
While there is potential for emerging transportation technologies to be implemented in the corridor, a busway or exclusive mass transit guideway is no longer a best practice or appropriate use of the right-of-way.
https://leginfo.legislature.ca.gov/...html?bill_id=201920200AB1025&showamends=false
If the right of way was railbanked, the state legislature could not have foreclosed the reactivation of the right of way for rail. The example you gave isn't what you think it is. It's the opposite. It's a strong argument in favor of railbanking.