Why would they handle it? The autonomous car has all the time in the world. If it takes too long, the car can just hit an error condition, terminate the ride, or maybe tell passengers to walk to the end of the street to get into another car. Then it can just ignore its surroundings and wait things out.
These cars get away with being incapable of following police instructions, I don't see why they would need to care about other traffic users.
Around Portobello Road you often get some quite impressive jams like that with two busses and about ten cars. If it just stopped in the middle it wouldn't be popular with the permitting folk.
In Waymo's favour the humans often don't do that good a job.
These cars get away with being incapable of following police instructions, I don't see why they would need to care about other traffic users.