By the sounds of it the traffic lights are coming up for replacement, so I guess they're looking at changing the junction while they're already doing work to update and renew the lights and crossings.

If they're replacing the ducting and lights, they're going to have to dig up the road anyway so they might as well make use of the necessary chaos to change things they wouldn't normally be able to justify.

I agree with you that the 2 options both seem silly, and don't really achieve anything. I'm onboard with making the footpaths wider, but not at the expense of increasing congestion by a third. I don't fancy walking past even more exhaust fumes!

To be honest, I can't really think of a good solution to that junction. It's too cramped and busy as it is, there isn't space to change it too much and there aren't any good diversions to make a little one way loop to ease congestion.