This arrangement is a hallmark of 'railroad got there first, town arrived later' construction. In tandem with the 'quiet zone' bullshit, where the town pops up in railroad territory and then residents complain about the noise of trains (and horns in particular), leading to it becoming regulation to not use them unless it's an emergency, shit like this happens all the time. Throw in that these residents are not familiar with railroads, they panic when presented with a train.

This road in particular has a 24/7 webcam maintained by the Virtual Railfan youtube team, and they regularly post clips of this sort of thing happening; including an incident last week where someone stopped at a traffic light over the line separating the driveable road from the tracks, and had their wing mirror ripped off and both doors bashed in for their trouble. The 10,000 ton train behind them blowing its horn didn't seem to phase them at all.