To my knowledge, the purpose of the tell-tale was indeed to warn brakemen. I can’t see how this could be considered “cruel”, as I, for one, would rather be hit by a rope than be hit by the top of a tunnel portal or some other structure! If you ask me, it would be moreso cruel if they didn’t have a telltale.
I haven’t seen any roadway telltales, but it wouldn’t surprise me if they served a similar purpose–to warn you that your vehicle is too tall.
Many telltales used chains to knock anything or anybody off of the roofs of cars. Brakemen likely would know their territory well and would be clear before the train got to the telltale. Exceptions would be Bugs Bunny vs Yosemite Sam and Shack vs A number one type situations.