Imagine two people in wheelchairs trying to pass each other on that sidewalk.

It's probably "acceptable" from an engineer's perspective because the edge of the sign is right up against the ROW line (probably the edge of the sidewalk) but doesn't encroach past it and there's enough sidewalk width between the pole and the street for wheelchairs to get by one at a time, but obstructing part of the sidewalk width like that is hardly ideal. If that amount of width were considered good enough, they would've just built the whole thing that width to begin with and saved themselves a bunch of money.