I often considered that a possibility that the BA&A did operate a Narrow Gauge freight service to start with. Some of this thought may have been too from the Lewis Book (as it was my first A&A reference guide). Now as I have done more research into it, I lean towards that picture being under the TV&C banner. However, as you suggest, the BA&A must have had some form of narrow gauge power at least for a short time. Newspaper reports around the forming of the BA&A talk much about the "standard" gauge railroad coming. Editors of the time were pretty descriptive in their writing as it was the only medium for news. After the cost of laying the standard gauge track, there would have been cost benefit to the widening as you no longer have the expense of a transfer at Attica.
My thoughts on it being a "clean up" train are that given the length of time that the line would have been shut down, the railroads would have been screaming for their cars back. Since it was narrow gauge, the smaller cars most likely would not have been sent off line. The freight would have been transloaded at each end into the smaller cars, or trucks changed out. There was a Ramsey Transfer at Attica and a turntable arrangement at Cuba for putting narrow gauge trucks under the standard gauge cars. Cars transferred this way were top heavy and wouldn't take the curves and unlevel track too well. In the picture in question, some of those box cars look rather large compared to the engine. If this was indeed the Erie traffic from 1883, they most likely would have been standard gauge cars on the smaller trucks. So, I doubt there would have been many cars left behind to actually clean up after. Much of the narrow gauge equipment was sent into PA where it was still useable under the TV&C. In various New York State Railroad Commissioner's Reports, you can see the amount of equipment go down towards the end of the TV&C. I'm sure if just for tax reasons, they wanted to get rid of as much as they could. With that said, a narrow gauge coach remained on the property until at least 1915 under the BA&A. It was actually retrucked with standard gauge trucks!
As for a #7 being there for the TV&C and/or BA&A, both are possible. I've seen it listed in both rosters in different places. If it was rented or borrowed by either road, it would need to have been returned. A locomotive is a sizeable investment and wouldn't just be forgotten about, the owner would want it back. This said, it would have been much easier for the TV&C to "borrow" it with a direct connection to the narrow gauge network at Cuba. As for the BA&A, at the time they would have borrowed it, it is doubtful that one could have been brought up from Cuba on the narrow gauge track. It would have had to have been loaded on a flat car and transported to Attica via the Erie. This in itself would have generated a news bit in one of the small towns as it rolled through. One might think they would need a narrow gauge engine for the construction work. Or, another though was just to install longer ties and slide one rail over enough to start at the north with the standard gauge. Then a standard gauge work train could be used to do all of the work. The north end of the railroad was supposed to have been built wider with the anticipation of widening the gauge as far back as the Attica & Alleghany RR. It was the southern half under the TV&C that was "thrown" down with parts of it built on wood trestle work instead of fill and grading. (quick and cheap)
But, it is all a bit of a guess since there are no first hand witnesses to it. It sure is fun to think about.