Do people forget how to drive if there are no lights? I can't imagine many people would think "well, there are no lights, which means GREEEEEEEN!". Over here, a traffic light that doesn't work means it's now a stop sign.
That's still a recipe for massive gridlock as treating most traffic junctions as stop signs doesn't scale unless there are traffic cops to manually direct traffic
I've never seen a traffic cop but I've driven past maybe fifty or a hundred broken or shutoff traffic lights, mainly in our largest city and never got stuck. Local law states that you give cars coming from the right precedence and the crossing self organises around that.
