yes, three rail wheels conduct from wheel to wheel.

So when one running rail is isolated, any vehicle present will ground the isolated side, thus closing an electrical circuit.

Since the axles are plain conductors it makes no difference if the electricity present is AC/DC or digital.

If you place two rail rolling stock on the track, you will find that their wheels are isolated from each other so they will not close the circuit.

Older level crossings were actuated by the weight of the train, but detecting ground no isolated sections of rail is ow widely used in our world for sensing the presence of a train electrically. It works no matter where the motive power is in the train - front, middle or end.

Some two rail guys add resistors on their axles to create a high resistance load across the rails and they detect that load to know when things are present.