"...you may decide to create two isolated blocks of track. Trains in each block are controlled by seperate transformers." The bold indications are mine. Nowhere does it mention any model transformer.
Sorry my bad, this is from the CW-80 equipped Polar Express set manual... but it's not unique to the PE, it's in all the starter set manuals.
Although it has happened at least once in the postwar era where Lionel recommended this wiring scheme using a KW or ZW, and posing a considerable possibility/risk of large fault currents and property damage, you don't really think Lionel would currently recommend it in their manuals(printed and online) without knowing what they're talking about? You would be underestimating the electronics talent at Lionel.
Passing from one block to another, powered by separate CWs(or PM-1s, for that matter) does not introduced the unprotected fault currents we all grew up with using postwar transformers. It is because of the way the power is delivered and regulated - electronically instead of mechanically.
If you don't accept it, all you have to do is run some empirical testing. It'll come out in the results.
If you want to do some reading on the technical aspects of the CW check out Dale's work on his Train Facts website.
