Of course, one traffic light will not ruin the line. After all, subway tunnels have traffic signals, and occasionally those signals break, causing significant delays. Nobody says that subway signals ruin subway lines.
But the concern is that the street-median section between the Laird portal and Don Mills portal will preclude running additional trains between Yonge and Don Mills, to deal with riders transferring from Lawrence East, Don Mills, and 100 Flemmington buses.
It is not end of the world; in the worst case, TTC will resume running 54 Lawrence East buses to Yonge instead of terminating them at Don Mills. But that would look rather silly, given that those 2.5 km between the two portals could be grade-separated for little or no extra cost.