Signalboxes are types of buildings and this restriction applies to all buildings in Simutrans.
From a players point of view, this is not true!
Station expansion buildings can be built on slopes without a problem as well as industries, housings and so on can spawn in slopes, building a basement.
Not sure if that comes with any cost or not, but in any case the same behavior should apply to signalboxes. the player should pay for the basement in any case.
Another big isue of early time interval signals is it's range.
250m might be realistic, but the difference in between graphical and economical scale kicks in here again...
Tracks effectively have a width of 125m, so even a simple branch of a double tracked line into two double trackes lines cannot be signalled with a single signalbox, no matter where it is placed.
If we could increase it to a little more, I guess 375m, there would at least be exactly one "perfect" location to place the signalbox in order to control that intersection.
I guess this is one of the places where we need a good compromise in between economical and graphical scale with reality in mind.
I may have missed something. Maybe such intersections were usually controlled by 2-3 signalboxes in the real-world or something...