Thanks Don & Steve. I believe I understand each of your explanations but a short description of operations is in order.
This is a short reverse loop because it only leads to a small quarry where one or two cars would be loaded. Movement of the cars within the quarry is done with a small switcher. Cars would be delivered to/from the quarry from the mainline using mainline locos so they would cross the wye and enter the quarry, drop off/pick up the cars, then exit the quarry via the wye. It is also possible for the quarry switcher to move the cars to/from the quarry by crossing the wye and drop off/pick up on one of the mainline legs of the wye. So, one of my questions is: can you have an operating loco in the mainline reverse loop and at the same time have the quarry loco move across the wye to move cars? If not, then a solution is to never have the quarry switcher cross the wye but this limits my ability to move the switcher to somewhere else on the layout - the engine shed in town for instance.