As per Operating Manual of Indian Railways -
A Passenger train nearing the end of its run should not normally be detained in preference to a train which has a longer run before it, as the latter train is more likely to make up time and reach its destination punctually than the former.

As Train No. 02795 is nearing end of its run...
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(as compared to Train No. 02204), Train No. 02795 should not normally be detained (in preference to Train No. 02204, which has longer run as compared to Train No. 02795).

Hence, there is nothing strange/wrong in looping Train No. 02204 (for crossing of Train No. 02204).

Further reduction in running time is not desirable/feasible in Guntur division, as the existing running time is provided as per norms only.

Running time allotted for Train No. 02204 between PGDP-KCC is 4:00 hours.
Bare Running time - 03:32 Hours
Halting...
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time at GNT - 00:02 Hours
Engineering Allowance - 00:17 Hours (6 Minutes for every 100 KMs)
Traffic Allowance - 00:09 Hours (For Crossings etc)

Running time allotted for Train No. 02203 between KCC-PGDP is 3:55 hours.
Bare Running time - 03:35 Hours
Halting time at GNT - 00:02 Hours
Engineering Allowance - 00:17 Hours (6 Minutes for every 100 KMs)
Traffic Allowance - 00:01 Hours (For Crossings etc)

Actual traffic allowance in Guntur division is only 9 minutes & 1 minute for Train No. 02204 & 02203 respectively.

Hence, there is no point in reducing the running time by 20 or 30-40 minutes.

It is not the matter of priority, it is the matter of train traffic in the section at that specific time.

None of the trains are scheduled to run ahead & behind of BZA-LPI Express.

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Train No. 02733 & 07015 are running ahead & behind of Train No. 02203 VSKP-SC Express.

Depends on the train traffic in section, running time is being fixed.

For your information, even BZA-LPI express's running time was high earlier, which was revised/reduced in multiple phases, subject to operational feasibility.

It may not be the same with all divisions.

For an example, through there is no stoppage for Train No. 02513 between Secunderabad-Guntur, still it is scheduled to trial Train No. 12748 Palnadu Express, which is having 8 stoppages between SC-GNT.

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the sake of saving 10 minutes run time for a weekly superfast train, it is not desirable to waste 20 minutes run time for a daily superfast train (as it is not feasible to provide different time table for remaining 6 days, where this weekly train is not running).

Even there are multiple instances, where in Guntur-Macherla DEMU was not given precedence, for (so called prestigious) Vijayawada-Lingampalli Superfast Express.

Similarly, Train No. 22882 Bhubaneswar-Pune Weekly Superfast Express use to trail Train No. 57382 Narasapur-Guntur Daily Passenger, between Vijayawada-Guntur (without any precedence).

One more example, Train No. 17230 Secunderabad-Trivandrum Sabari Express, use to trail Train No. 67255 Guntur-Tenali MEMU, without any precedence (frequently use to stop at Sangam Jagarlamudi, for clearance of Train No. 067255).