I strongly recommend fast acting circuit breakers in addition to the TVS protection diodes. I've repaired quite a few locomotives and passenger cars that had cooked interior wiring from a roller landing on an outside rail during a derailment. I agree with Rob that fast acting circuit breakers don't protect against voltage transients, but that's not the only risk our poor trains face during a derailment. I'm also an advocate for TVS protection diodes on the transformer feed to the track.
If you're also running MTH DCS, there's additional stuff we might discuss.