Even if you think what you would say is obvious, please add. This is genuinely something I think makes sense regarding local bus routes given the longevity of light rail and how infrequently routes change, but I also suffer from confirmation bias, so I'm hoping for reasons this would be a terrible idea but obviously would prefer reasons it would be an even more amazing idea than I thought.
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The roads are only 2 lanes wide in most part of this city, so you couldn’t really have separate lanes there (unless all the traffic only went one way). The tram goes in/out of the city from the suburbs on its own railway line in most parts, so that works well although it was slow and expensive to build. And in the city there are cycle-only lanes but cars and trams share the rest of the road.
But cyclists would still be at risk, even with separate lanes. The two accidents (both a lot of skin grazing and one broken arm) that I know of were when cyclists have turned on/off the tram road to/from a side road and have gone over the track at a very acute angle. That said, both accidents happened just after the tram lines were built, so I think cyclists are able to avoid accidents but just need to be aware of how to cross the track safely. I have cycled there an it seemed pretty obvious how to cross, but clearly not so for everyone.
The best solution would be to have electric buses, but I’ve never heard of them (except for the ones with overhead power that they had in the 1950s). Same environmental benefit as a tram but no tracks to trap cyclists. Routes can be changed, when needed, and breakdowns don’t stop the flow of other trams and cars.
Oh, and two other problems with the tram system, at least in this city. 1 it’s funded by a ‘work place parking levy’, as well as the ticket price. So people who can’t use the tram to get to work and have subsidise people who do use the tram. That wasn’t well received. It also creates a lot of bureaucracy for employers who have become responsible for paying for it. The city council claimed that the tram system would still benefit motorists because there could be less traffic. This turned out not to be at all true. 2 And residents who were unhappy about having tram stations (raised roads, booths, lots of people, etc) built outside their homes were told by the council that they should be grateful because the transport convenience would add value to their homes.