It’s both an appalling acceptance by the community and a very poor refusal by Niantic to remove it. Very clever main photo, obviously from someone who knows this shouldn’t be accepted, but the reviewers shouldn’t be looking just at the main photo.
They may have used the neighbourhood sign as an anchor point as the only other thing that I can see is the regulation sign on the right as you enter the trail.
Just looking at it again, that seems to be what they were doing as the did not enter the sign and it is the trail they nominated.
The sign it’s should easily be in scanning distance although in the middle of the junction.
The neighbourhood sign has nothing to do with the trail and cannot be an anchor point for it, as it is not on the trail, but vaguely near by. The main photo makes it look like this could be a trail marker, if you squint and don’t look properly, and definitely hides the location as being in the middle of the road.
Possible interpretation, but they also don’t mention the sign as part of the trail, just the trail and that is there. Location may be an issue though.
The placement is also on the trail side of the road looking at the map so it is not in the middle of the island either but is to the left of the trail.