As soon as one train brakes, the train behind should automatically brake. The separation distance can be maintained. The problem is if the first train hits an object or derails, this might cause it to slow down faster than the brakes would have done, and the following train may not have time to stop.
What happens if the train in front is a passenger train (a passenger pulled the alarm handle) and the train behind is 30 cars loaded with coal, steel beams or diesel fuel?
You can still brake - you just need (automatic) agreement of all trains behind you to do so.
You aren't allowed to brake 'as much as possible' anymore - instead the best you can achieve is 'the best the worst of the trains behind me can achieve'.
Thats already the case for carriages within a train.... And people are fine with it.
We're also fine with the risk of a derailment onto a neighbouring track with traffic going the opposite direction. We could have tech which detects that, but we do not.
The thing you are missing is compartmentalization. A modern high-speed train can hold around 1,000 people. This is the maximum number of people that could die in an accident (ignoring trains on other tracks or people next to the tracks). What you are proposing is essentially a train of infinite length, with virtual (software) coupling between groups of carriages. But then there is no limit to the maximum number of deaths in an accident. If you have 50 high-speed trains all traveling in this virtually coupled manner, a single accident may cause 50,000 casualties. People would not accept this, and no sane policy maker would allow it.
Note that if you consider derailments into neighboring tracks, you still have an upper limit of 2 times maximum train capacity, in our example 2,000.
You could also characterize the maximum braking ability of the train in front of you and the minimum braking ability of your own train and determine the needed distance for any given speed based on that. This would of course be more complicated and probably be solved by only including broad categories of trains (i.e. only two sets of values for either passenger trains or freight trains).
