it doesn't sound hopeful.
I was thinking of perhaps a dab of epoxy on the tooth and then reshape it with a small triangle file to rebuild the point. But, a lot of times, stuff doesn't adhere to nylon.
Without the gear point it won't grab. Replacing the unit with a series 2 unit and pinion gear is almost half of the cost of new unit.
Hail Mary - call Lionel customer service - perhaps one of the techs has a repair solution that is reasonable.