It is not clear when trains 425-426 became mixed. Dick Dorman liked to show me a photo taken in the 1920s with a T-12 heading south from Antonito with a freight car cut in the passenger consist. Looking at my 1932 timetable, it looks like freight trains were operated as extras, as they were throughout the narrow gauge system in later years. Like Jerry points out, having heavier rail allowed K-28s to easily handle any of the diminishing freight traffic. A crew with a small 2-8-0 was stationed in Embudo under steam for decades to help freights up Barranca Hill, and it was eliminated after the arrival of the K-28s. The turntable there was also removed. Engine crews were happy to see the T-12s go as they had the lowest pay rate of any of the D&RGW's road locomotives.
My guess regarding restrictions on bigger K-class locomotives below Barranca is that the curves were very sharp between Barranca and Embudo. Similar restrictions existed north of Rockwood until some curve easement and bridge repair was done in 1981.