Pedestrians are everywhere. Buses drive slowly and wait for pedestrians to move away. As far as I understand, pedestrians have precedence, legally given by the signage of the pedestrian area.
De facto, I think it behaves as a living street: different surface from the regular roads, no pavement-road distinctions, all users (pedestrians and buses) share the space with common sense. Living streets, however, seem to imply a legal designation of "home zone" and related blue signage.
A designated road for pedestrian should not be anything else, in my opinion. I strongly feel this should not be a regular road. 

As for the last bit at Carfax, you are right. The signage starts at the very beginning, so there is no space for the taxis in Queen St itself (except when they are allowed at night of course, when mostly they wait there, but I don't think there is an official bay). I will check the connecting segment named Carfax, which they can use for turning during the day.