... I am not talking about running the motors on half-wave rectified DC, there is a bigger problem. There are ways to apply the concept, but the example here is not correct.
Seems even today, some 50 years later, there's still the application to operate 2 trains independently. Some would say command control and move on...so be it.
But this could be a baby bath-water situation. I'd think modern components could make this concept more viable. Specifically some form of synchronous or active rectification where the two rectifiers respectively turn-on when it's their turn (60 times per second) and then shut off when the other is active. This would prevent the shorting, back-feeding, or whatever you want to call it when the two voltages vary by more than 2 diode drops. The synchronous rectification would likely be implemented with power transistors synchronized to the line cycle. I'd think the cost would be just a few dollars and less expensive and more power efficient than using high-power rheostats.
I fiddled around with this stuff in junior high school over 50 years ago, including the circuit in question. It was pretty sad. If you search back through the auto-radio archives, you will discover that early radios used a mechanical vibrator, basically a glorified doorbell buzzer to generate AC that could be fed to a step-up transformer to generate the high voltage necessary to run vacuum tubes. Ordinarily, the output of the step-up transformer then went through a full-wave gas rectifier tube like an 0Z4 to produce DC.
I modified one of those so the coil ran on 60 cycle ac and hooked it up to a couple of train transformers to get the effect we are discussing. Basically I had an spdt relay that followed the 60 cycle line. It sort of worked, but in that era large low voltage capacitors were bulky, rare and expensive so I really couldn't filter the DC at the loco, and the vibrator contacts bounced and chattered and all that. Of course, due to operating time of the mechanicals and the inductance of the coil the synchronization with the power line was less than perfect so there was bad sparking at the contacts.
I spent a whole Christmas holiday fiddling with that and finally gave up. I had some C. P. Clare mercury-wetted relays that I tried to use but those did not give a break-before-make when run at high speed. Also tried the transformer method under discussion but burned out all my dad's epoxy rectifiers, and it didn't work anyway. Semiconductors were expensive and not very forgiving in that era!
Boy, I had a lot of fun back then!