Sounds like this is like most blanket laws- they don't always work the way they were intended in all circumstances. I fully agree that recreational paths are more dangerous than riding on the streets due to the unpredictable nature of pedestrians (they can move in any direction instantly and without warning). A blind intersection with a non-vehicular road ups that risk for cyclists.
This law may be fully justified elsewhere in the city however, and but we don't have that information. If the law is overall effective and increases safety (doubtful) and this is an exception to the benefits of the law then perhaps you should work to get this specific instance exempted or the specific problems addresses. Traffic controls or a bypass may be an option if this is the only area of contention. If their are multiple problem areas fixes may be prohibitively expensive for the city. If, however, the law actually increases risk on the whole and you have the time and energy then by all means you should work to get the law repealed.