christhetrainguy09 posted:So basically this senses current draw when a loco is near the drop in the track? Gap the center rail and it senses the current draw in that block?
Yes. What nice about the OP's bridge-rectifier "current sensor" is that it generates a 1.4V (or so) output voltage for a wide-range of currents. 1.4V is plenty of voltage to trigger down-stream circuits for signaling or whatever. An 8 Amp bridge rectifier is less than 50 cents on eBay:
OTOH, the current-sensor in GRJ's eBay module or the current-transformer doughnut sensor generate an output voltage proportional to current flowing in the circuit. So if your consist consists of un-powered cars, you need to figure out a way to draw current for non-engine rolling stock which do not draw current. Otherwise you have an occupancy detector that only detects occupancy of current-consumers (engines, lighted cars, etc.). In HO systems this is routinely done by replacing wheel-axles in non-powered cars with wheel-axles that have a resistor built-in to draw current between the 2 rails!
This current-sensing approach to occupancy detection is applicable to the OP's layout because it is a subway where consists (typically) have all lighted/powered cars so you are "guaranteed" to draw some current from end-to-end. As mentioned, in HO you replace insulated axles with ones with a resistor built-in to draw some current. In O-gauge I suppose you could replace an un-powered wheel truck with a powered wheel truck (i.e, one that has a center-rail roller/pickup) and insert a resistor, lamp, or some other electrical load that draws current.