Note that there are a multitude of applications where an LED is driven many times its average or nominal current. Probably the most familiar example might be the flash LED in a smartphone camera. Here it might be driven, say, 10 or more times the nominal current for a very brief instant. But if you activate the smartphone's flashlight mode, that same LED would not be driven at the same current as the momentary flash or else that LED would smoke in short order. As with most electronic devices, there are ways to build an LED to better handle an application where the peak current is many times the average current. But for a general purpose, hobby-grade red/green LED for a model train control panel I can't imagine any manufacturer would bother with the extra engineering effort and documentation. In other words you get an it-is-what-it-is behavior.
Frankly, what I'm thinking is how to chuck all this peak, rms, average, half-wave, full-wave stuff and go direct DC. I realize you already have the ZW but it kind of bothers me that it is being drafted for fixed-voltage DC service. Yes, I get the story about using only 1 diode of the 4 in a bridge-rectifier but an entire ZW. Plus, there's Rob's observation that you are only using "half" of the AC signal as currently configured. Not sure what your direction is there.
Anyway, I see that you can get a DC wall-wart adapter/brick for about $10 on eBay that would put out regulated (fixed/smoothed) DC. These so-called universal laptop chargers are compact 90 Watt bricks with a switch to select the DC output voltage (15V, 16V, 18.5V, 19V, 19.5V, 20V DC for example shown below) and they put out 4.5 Amps or more. Note the size relative to that of a ZW! Plenty of power for your switches/LEDs.
