Trains did, and still do get held on the direct curve all the time and the curve is long enough that they can do this without fouling the Dublin - Cork main line. See signal P7 in this shot.
http://jandjcottrell.zenfolio.com/p228051995/h2ffaf7d8#h2d9da195
The loop (I think it's called the pocket loop??) was effetely a passing point on the Limerick to Waterford line and would have got more use when the Limerick to Waterford route had a lot more freight, and just happened to be where the direct cure ended.