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It's picking up slow downs near stop signs and intersections. It doesn't necessarily mean traffic - just that the average speed in those zones is below the speed limit.
I have pretty much ignored the traffic lines because I have had dead stop traffic for miles with not orange or red indicator and I have been cruising at 45Mph or so on a local road where it showed lots of long red lines.
I now just assume that traffic is an estimate based on what it should be at that time, based on history.
Traffic always shows what it was, not what it is or will be.
Yes, it seems to show when cars slow down for stop signs.
Orange often isn't worth worry about, red warrants your attention. If a long red, then that probably isn't good.
tesla nav is powered by google maps api, right? i think it's safe to assume the maps api calls the traffic feed google uses by farming data from other drivers that use google navigation. if the traffic data hasn't been updated in a while, the information will be stale.
most neighborhoods don't have traffic sensors/cameras off of the main roads and unless you're living in an urban sprawl, the taxi and ride share data is probably minimal as well. the data is only as real time as it is fed, which i've seen a 15 minute disparity.