It is for light rail/trolleys (not buses) and only when you're on a two-way road and there's room to pass on the right. It also applies when they're moving, not just when they're stopped.
Basically, if a trolley/light rail has tracks in one of the left lanes of a two-way road, you must pass on the right unless directed otherwise by a traffic cop.
The reason is that these vehicles obstruct vision and you're not allowed to overtake and pass on the left when you can't see oncoming traffic or when approaching an intersection/grade/curve/oncoming traffic or your view of a bridge/viaduct/tunnel within 100 feet is obstructed.
I don't think needing to pass on the right is a defense against driving on the sidewalk. I think it just implies that you cannot pass while they are picking up passengers.
Yeah I think the intention is to prevent someone who disembarked from the bus and are then crossing the street from getting mowed down by a car overtaking from the bus's left. It's similar to why you can't pass a school bus when it has its stop sign out.
It was clearly a typo in the book. There’s even a diagram showing that people are loading from the right, and a sentence saying you pass on that side while passengers are loading.
If they meant “don’t pass while it is stopped”, they would have said that instead of writing the equivalent of “you can pass when [false]”
Fun fact: If there’s a bus or trolley car picking up passengers at the curb, you must pass it on the right in CA.
I’m almost tempted to try it when there’s no one but a cop around, and then hand the book to them when they pull me over for driving on the sidewalk.