> but how will this perform if there is not the occasional car making test runs through town, but when all vehicles on a busy road or intersection are equipped

This is called "jamming" and was a real problem for early radar solutions.

Curiously you well rarely see anyone mention this in the LIDAR space. For many of startups adressing this issue seems to be an afterthough.

One proper way to solve this is to use orthogonal codes in the scanning scheme. There are different ways to implement this. The complexity depends a lot on the used LIDAR architecture. It would not be surprising to see some of the startup being weeded out by that during real-world tests.