It wasn't a sewer line that was installed. What happened was the concrete culvert had collapsed, causing the creek running through it to flood, which caused extensive property damage to some nearby homes. Septa was responsible for that, of course, because they failed to maintain it. They came in and removed what was left, lined the stream banks with gabion baskets, and did some erosion control work to the remaining slopes. Shouldn't be much to come back in with a precast culvert and then backfill it. There was another much larger culvert between George School and Newtown that was actually replaced with a new one. Not sure when that was done, or by whom. Then there was the small one at Second St. Pike that had become blocked and caused flood damage to the adjacent stores. Again, they replaced it, sans rails and ties.
Fwiw, I use the trail frequently in the summer. In good weather, you might encounter a couple dozen others along the way. I think the trail could coexist with the railroad given some excavation/filling/rerouting, and of course a fence. See: WMSR, LGSR.