I believe V12 is the most promising approach for generalized fsd, and it's already performing very well. You will see what I mean when you use V12.
But as we know from prior versions, any small issue can become a fatal flaw over time
As for police directing traffic and whatnot, I think it's a tractable problem with V12. I think lane selection in heavy / obstructing traffic is a harder problem than following hand-arm signals, but I could be wrong.
At the end of the day, the real answer is something like: yes, I think V12 will eventually be the approach that leads to 3-10x human safety performance (along with all the smoothness and naturalness that V12 brings) -- no, it won't be perfect and understand every little thing, but it will be safer than humans by far, and the real question will then be: will society accept a system that can fail but is 3-10x safer than humans?
As for the timeline, it's unclear, but again, if you use 12.2.1, it seems very close (2-3 years for this generalized robotaxi, perhaps the first HW5 cars?)