Interesting, I haven’t noticed this before, but then I hadn’t tried to cancel the trains. From your description I infer that the AI does not compute nor contemplate inter-city travel unless there is a line connecting them. It would seem that only then does it attempt to move people from one city to another. The reason for the traffic jam is simple enough – the AI finds making the trip by car faster than by your train. Improve frequencies and feed more people to your station via intra-city transport. Failing that, bulldoze a bit of the road between the two cities – though that is technically an exploit.