Aren't the level crossings which are protected also protected rail wise by a coloured signal?Some LXs are interlocked with signals such as the Up Departure signal at Sunbury (you can sit in the platform with a red over red aspect and the LX which is only 50m or so ahead is still open for vehicle traffic however I don't think they are on the Bendigo - Echuca line, signalling on that line is pretty rudimentary.
I am not even sure how it works on the Bendigo line proper, I would be interested to know, the sections are pretty long between signals and I don't think the LXs are interlocked with the signals. Say between Woodend and Kyneton where there are a number of LXs. From memory there is a signal on the Down side of Woodend and the next signal is the co-acting pair at the cutting on the Up side of Kyneton. (I am not 100% sure on this and would love a clarification)
All crossings with lights have Healthy State Indicators of course but by the time the driver sees that one is not working he/she may not be able to stop before the crossing (although the train would scrub off a fair bit of speed before it got there, especially from 75km/h!)