All the cars are cooperating. Sensors everywhere. The position of every moving object on the road is tracked to within a meter. Any car that enters the bicycle's safety zone gradually slows down to 10mph long before there's any chance of contact. It would probably cause a very minor delay for cars, and none in cases where the cars can route around the bicycle. Or whatever... There are probably a thousand safe ways to make it so bicycles can go nuts in a world with 100% computer controlled cars.
That describes a perfect system in which visibility is always optimal, and there is never any such thing as inclement weather, network delays, mechanical failure, proprietary software, manufacturers cutting corners, blind spots or false echoes or any of the thousands of ways things can also go wrong with a system as large, complex and interconnected as that might be.
Sort of like the way "cyberspace" was described in sci-fi as sort of like virtual reality or augmented reality or Project Xanadu, while in practice what we got is is a document layout format with a half-assed Scheme tacked on to spite Microsoft, what gets implemented is usually always the minimum viable product.
I don't think you're paying attention! Many millions of us have been interacting in 3d combat/flight/driving simulators for years. With < 20ms internet latency and high frame rates it's a pretty amazing experience. We call them 'video games' like they're similar to what NES games were like, but they're everything people dreamed of for VR. Now we have head mounted displays, completing the picture.
I'm guessing cost. It would be like asking people walking to only do so with a specific piece of hardware. The issue is as much to do with creating segregated space for walking, cycling, and motorised vehicles. Ideally you do not want them to mix. A bicycle is a very powerful way of "enabling" kids to get around, but you need to provide safe transport networks that connect communities to schools etc.
