It would be a good idea to add a gif of what this mod adds. I think I understand what it does from the description, but I am not sure if I understand correctly. A GIF would help.

Yeah thats certainly on my todo list!

short description is basically as follows:
- rails marked with the new rail decon tool will be followed along their route until a merge to another rail is found (exception when that merge is also marked for deconstruction)
- all rails that can be traversed that way will be marked for deconstruction (along with signals and trainstops)
- identical behaviour when you want to unmark something (shift while selecting, just like the regular decon planner)
- hitting the hotkey while hovering a rail or signal will do the same