Traffic designations seem to be an area of massive confusion. Here's how they work. First, they have absolutely no impact on where a dwarf goes or doesn't go. That is not the purpose. No pathing calculations are done when a dwarf makes a decision about what to do next. Distance from the dwarf to the activity is calculated as the straight line distance between the two points. Only after the decision to begin a certain activity has been made does the game calculate a path between the dwarf and his destination. And it is only during these pathing calculations that traffic designations are used.
If there is only one path from the dwarf to the destination, traffic designations do absolutely nothing. The dwarf will take the only available path, even if he must path through a billion restricted squares. He has already decided what he must do, the only question is how to get there. And it is only when there is more than one potential path that traffic designations do anything. While calculating how many steps a particular path takes in order to determine the shortest path, normal traffic tiles count as two steps, high traffic tiles count as one step, low traffic tiles count as five steps, and restricted traffic tiles cost 25 steps.
Traffic designations can be used for many purposes, such as ensuring your dwarves walk on either side of a three tile wide hallway and leave the center lane free for passing. They can help ensure that your dwarfs take a longer, safer route over a shorter, more dangerous one. They can also help speed up FPS if used right. For instance, say you have a dead end hallway. The game might need to check every tile right up to the end to find out it is a dead end. But if you designate it as restricted, the game might only have to check a few tiles before it concludes that that path is too expensive.
Traffic designations do not restrict where a dwarf will go, they just help suggest what path he should take to get there. If you want to restrict what jobs a dwarf will take to begin with, use burrows. If you want to actually restrict where dwarves will go, use burrows set as civilian alerts or locked doors.