The key is that both adding car lanes and adding alternatives like transit are subject to induced demand, but the consequences of it are different for transit than for cars. Not only is the limit of the added capacity much, much higher for a train than it is for a car lane, adding more traffic to the lane up to that limit makes the performance worse and worse (increasing congestion), while adding more transit ridership up to its limit makes the performance better and better (increasing train frequency and therefore reducing wait times).

Similarly, induced demand for walking and biking is a good thing because more people doing those things improves public health, doesn’t pollute like cars do, and takes up much less space.

So it’s not that induced demand is bad, it’s that inducing demand for cars, specifically is bad.