It's both.

There's nothing inherently wrong with single track if not many trains have to execute a meet. Given SMART's expected operating pattern, there should be little issue with trains having to wait a long time in a siding. Single track will limit their expansion possibility if many more people that expected want to ride it, especially reverse commute; they should have such problems!

The engine is a problem for Cummins, but with SMART they're running more or less on a shoestring as well as single track - not much in the way of backup equipment. So yes, a breakdown is statistically likely to occur in a bad place for passengers, if it happens, and their fleet would take a significant capacity hit if a trainset is down for a while (how quickly CAN those engines be changed out in SMART's shop? Overnight?). Given that Cummins is willing to replace the engines (under warranty, apparently), and there are still some other delays and issues to sort through, it makes sense to get the work done before starting up.