That is an interesting rumor. (I think) the Southern's ROW down to Lakehurst is owned by NJDOT, not Conrail Shared Assets. From Lakehurst- Woodmansie, the ownership of the right of way was transferred from Conrail to Clayton Sand sometime in the early mid-1980s. South of Woodmansie, at least down to Winslow Jct. and perhaps beyond, I think is owned by NJDOT.
I wonder if CSAO "operating rights" on the Southern and Freehold lines were transferred to the NJSL? If the rumor is true, including reconnecting the Southern with the Freehold line, it could mean the end of freight service on the Coast Line. But, at the same time, I believe the Freehold Industrial track has not been operated past Okerson Road in Howell since the late 1980s/ early 1990s. I remember heading rumors shortly after Hurricane Sandy that NJT was exploring an equipment move off of the then crippled Coast Line, via the Southern and Freehold Industrial, but the track conditions between Okerson Road and Farmingdale made the routing impossible.