Looks like wheelslip rail burns to me...
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Best guess based on the limited view of the pic. Any special track work, frogs, diamonds, etc. and rail in close proximity to them take quite a pounding, and this pounding quickly brings out the flaws in rails, or creates them. From the pic its obvious there is a fracture along the length of the railhead from the divot and heading to the right of the photo. In the divot you can see the fracture break out the side of the rail head, meaning it's likely heading down the web if it hasn't already. The divot is from grinding from a MOW crew to inspect the fracture and to remove further stress risers in the area created by it. It looks like they've chosen to try and keep the rail in service as long as possible by applying those joint bars in the pic where there is no joint. The insulated joints are used there so that any further fracture in the rail can be detected by the signal system and electrical current won't continue to be carried by the joint bars masking a complete break. That's my best guess estimation based on what I can see in the pic. I could be totally wrong without seeing the "whole" picture of the area.
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I don't think it's a wheel-slip - wrong side of the rail-head and it's too sharp at the bottom
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Looking at the excellent ballast and tie condition one might wonder how such a rail could be in service here. The answer is that this is a new design of insulated joint where, instead of a 90-degree cut, each rail tapers creating a long smooth transition from one rail to the other.
In the photo above, the rail closest to the viewer ends to the left of the fourth bolt counting from the left. The other end of the transition is held by the joint bar just showing on the right. The immediate area is ground down to prevent pounding from the wheel as it makes the transition from one rail to the next. The brown line on the top of the rail shows the insulating material between the two tapered pieces of rail. This design has been tested extensively and is just now being deployed on several railroads.
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As a former welder for the BN, I would say this is an accident waiting to happen. Such a fracture should have been taken care of long ago. Look at the rust of the bolts, telling us that these may be damaged so much as to break. Such a sight gives me the shivvers! How in the world would one excuse this sight as a "safe" rail.
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