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In depth idiot
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I had considered an isolating section (both tracks) at one end of the chord but even that has problems because a loco could, at a certain point, be picking up current with opposite polarities at each of its ends as it travels over the gap in the tracks (!) Could that not do significant damage to it ?
It doesn't damage the loco, or at least none that I have seen it happen to...

For DC the loop is made into a fully isolated section, with switching to reverse polarity once the train is fully in the isolated section. Then the train runs in on matched polarity, stops fully in the isolated section, polarity is switched and the train then resumes movement with matching polarity as it leaves the isolated section.

For DCC a very rapid switch (in a 'return loop module') takes care of switching over rail supply when the short circuit is detected as the wheels pass over an insulated break in the loop, loco keeps moving throughout. Just one of many good features that the expense of DCC provides.
 
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