If you think that manual inspection is somehow an automated system, then you think you're right. I suppose that you want us to go back to hanging out train orders with hoops, too.
Exactly!!! Now you are finally starting to get close to understanding the reality.
Degraded operations including manual mode is part of the design of the failure chain in any automation system. So yes, when all else fails it is "train orders on hoops" time.
A normally operating system would display the setting of a switch accurately reflecting its current state on the CETC model displays. When the switch system fails the switch is shown as out of service on the model display, and the signal protecting the switch automatically turns to Stop and remains there until the switch communicates that it is back in order. When the CETC detected the failure they sent a MoW staff to spike the switch and get trains through manually, while the automation system is diagnosed and fixed. That is what the MoW staff was doing there. The signaling system was still operating enforcing "Restricting" speed, and enforcing Stop at the Davis Home Signal.
The reason that Rule 241 had to be invoked is because normally a Home Signal cannot be passed at danger under any circumstances, and the train's control computer would not let it through absent the release message under the rule. A Block Signal OTOH can be passed at Restricting speed normally after a full stop at it, except in a few situations where it can be passed at Restricting speed.
When a system is in a state of degraded or failed automation then indeed, notionally you hang "train orders on hoops" - virtual hoops, that is - you use a radio to read and copy a Form D or a Rule invocation or such, to the engineer/conductor and/or the train's control computer. The radio message mentioned in the last para is the equivalent of a "train order on a hoop" in this situation. No amount of insisting that all aspects of operation under all circumstances of failure should be covered fully by automation is going to make it so.
The system worked exactly as it was supposed to. Through best effort exercise of degraded automation it minimized damaged in face of failure to properly exercise manual protection, mostly by humans in the process of working around automatic protections without apparently being sufficiently attentive to details most likely due to omissions rather than commission.
For those that are interested in actually learning about such things instead of being armchair engineers proffering opinions based on lack of knowledge, I'd recommend starting with the
Wikipedia article on Railway Signaling. Then you can read about the
PRR Pulse Code Cab Signaling system which is the CTC/CSS system in use on the NEC. After that you can read the
Wiki page on ACSES which is a good introduction to the ACSES overlay on CTC/CSS used on the NEC under which the train was operating at Davis interlocking. After that if you are even more interested I will be happy to share with you technical papers on the design of the original PRR CTC/CSS and then the ACSES overlay on it, so that we can have a meaningful discussion based on knowledge and facts, the ones that a few of us have been trying to patiently present to apparently a few quite non-receptive in the audience. Of course be prepared to exercise your brains to quite an extent since all this is not easy stuff.