I happen to work for a council and know the general order of magnitude for road infrastructure investments - I participate in their approval. I would file this suggestion of "building smaller intersections", that is, completely re-routing the traffic flows in a given area, in the
purely fantastical bin.
If we could squeeze 20% more traffic capacity from a given congested intersection with a one time investment of, say, under €200K, it would be a major breakthrough. We use a complex system that involves periodically measuring traffic flows using pneumatic tubes, then feeding that data to a computerized model that will produce the timing sequences for the lights lights and their evolution during a day. There is a crew moving around the district installing these tubes and counters for a week or so.
The current state of the art are induction loops embedded in the asphalt that measure the number of incoming vehicles and adjust the timings in real time. A purely optical detection that can work in all weather and recognize all types of vehicles or even pedestrians would be quite a feat.
Anyway, thank you for your factual and data infused contribution.