You're right its great to meet people who have an attachment to their local environment...shame the LGA didn't try to envolve them in the activity even in a symbolic way, it makes any works program way way more effective and successful long term.
Compaction even from foot traffic has an effect, trees have evovled in environments where such major soil compaction as limited, as the veg gets denser the compaction is reduced more and more. But clearly trees have the ability when healthy and vigorous to cope with moderate compaction no problem, your skid steer would have compacted the soil for sure, my advice to the city would have been to spray chips over the area after the work as done, but the mulched debris being spread over the soil is good.
Decompaction is good but its slow and most LGA's won't spend the $s, which one limited budgets I can understand, less expensive options include soil and root treatments of dilute seaweed extract (very cheap and
very effective) There's a thread here on suger water
Sugar water for trees, good or bad? Soil | Carbon | Plant Sugars | Roots
with some data on the effects of sugar on annual weeds, again cheap (relatively) enviro friendly (extremely) and beneficial to soil food web for trees
