It is confusing because its the result of so many mergers, reorgs and line consolidations.
But let me take a shot at it.
The IC used to reach the Seymour Spur, which was originally part of the Havana District for the IC by a spur that ran from their yard north of Downtown Champaign, down North Street, which crossed the Peoria & Eastern, (former CCC&StL/NYC) now the NS Mansfield Branch.
The Wabash had a branch line that came up from Sidney, Illinois to Urbana and was aligned right next to P&E, crossed the IC just north of the original Central Depot and connected to that IC line between State and Randolph Street. The Wabash also had a freight depot in Champaign with a small spur that ran right next to the IC to the south at Washington & Market.
The Illinois Traction (forerunner of the Illinois Terminal) ran tracks up Neil Street and had their power plant and shops between North and Tremont Street.
Norfolk & Western bought out the Wabash and took over the Sidney Branch. They also bought out the Illinois Terminal which had trackage rights on the Havana Branch when they stopped city service and went all freight in the 1950’s.
IC disconnected the Havana District at White Heath and it just left the Decatur District the rest of the way, which Illinois Terminal used for their customer AE Staley. Now that NS owns the ITC they assumed those rights across the Havana and Decatur Districts. CN eventually took the Havana/Decatur District out of service (past Seymour) as NS reached Decatur from a different direction.
So NS didn’t need to keep that line that ran from Urbana anymore, they had taken over the former NYC line through town, and took up the former Wabash except in Champaign.
IC took out the spur down North Street and moved their connection to the now former Havana Line using the spur that had been used to interchange with the old NYC (now NS).
NS kept the former Wabash line seperate because now CN was using the former spur to the old Wabash freight house as a connector to reach the mainline going south.
Move forward to today. CN doesn’t need to move freight in and out from the south over the former Wabash spur. They now have direct access to their yard using the former NYC and taking it to the yard to the north.
I think (many moons ago) the Wabash used to back up a passenger train into Central Station for big football games, but I don’t have that info in front of me.
NS owns the former NYC line through town, so they moved the Sidney Branch east and connected it to the NYC in Urbana.
When NS consolidated the former Wabash and NYC lines, this left this little spur and switch between State and Randolph which had become an “island” between 2 CN owned tracks.
This is where I was confused on why NS owned 1 signal and CN owned the other at the State Street crossing.
That is a lot of words on the why. I recommend you look at various historical maps of Champaign in 1920 and 1950.