American Flyer trains were designed to operate at a maximum of about 18V. That is true even with the postwar S gauge engines. When using Lionel transformers it is best to not use higher voltages although the motors are robust and will withstand overvoltage for a period of time.
The old transformer output voltages were rated assuming 110V house current which was common in the 1920's and 1930's. Add about 10% to the output voltages with modern 120V power systems. The output voltages of that transformer seem too high but I would not hazard a guess as to why. Did you have a load on the transformer such as a running engine when measuring the voltage? It could be a bad winding as you suggest.
