In Europe, SLM used a similar compression braking system called the Riggenbach. It has been used successfully on the rack engines built from the 1890's up through the new rack engines constructed in the 1990's for railways in Austria and Switzerland.
They also applied this system to the 2-10-0 NG 52 8055 which is to be used to pull the Orient Express. I believe this is one of the first (if not the only) application of this system to an adhesion engine.
I believe the Riggenbach system uses a separate set of throttle valves to route air through the cylinders and compress it for braking, and a small amount of additional water is sprayed into the cylinders in order to cool them.
This discussion does raise the question "why didn't steam designers develop a workable standard 'dynamic type' brake for steam locomotives?" Dynamic braking seems to have been one of the diesel's big selling points, and the technology obviously existed to fit workable dynamic brakes to steam locomotives. Seems like a lot of railroads other than the D&RGW could have used such a system.
Good Steaming,
Hugh Odom