Steve:
Unlike the original poster it sounds like you're only running post-war equipment so you shouldn't be worried about damaging any sensitive electronics. However, lightning or power company voltage spikes can still present a problem and your ZW's original internal breaker may someday fail so an external breaker would still be prudent.
According to page 23 in the attached 1965 Lionel Operating Manual your ZW was designed to supply a total load of 12 amps continuously without overheating. And that means the total load from all 4 circuits combined and not a load of 12 amps on each circuit individually. That page also says that each 2-motor diesel with 2 headlights draws 2.9 amps so with two of them you are almost up to 5 amps before you add any additional loads that are connected to any of the other terminals of the ZW. It also says that a 5-car passenger consist with two lights per car will draw 2 amps which means that ONE 5-car passenger train pulled by a double-motor diesel with 2 headlights will draw almost 5 amps. When you are running two of them at once you are almost at 10 amps.
You say you have no other loads connected to that transformer so if your total normal max load is 9.8 amps there would probably be times under certain operating conditions (i.e. higher speeds) that you may possibly draw more than 10 amps which would trip a 10-amp breaker and shut down your track unnecessarily. So you should be safe with a 12-amp breaker as that was what your transformer was designed for.
Bill (an old EE)
