Dense traffic is less safe than loose traffic. Having a dense traffic flow behind the blockage is going to negate any wishful thinking improvement you get by reducing traffic speed by 10%.
It's not that simple. According to [1] the relationship is U-shaped, with the least accidents per million miles driven occurring at about 1500 vehicles per hour. Less traffic increased accidents number, more traffic decreased accidents number but increased average number of cars in each accident. The sweet spot was in the middle.
Additionally after a certain traffic threshold accidents stop being deadly (because of slow speed).
But the results varied depending on road types, countries, time resolution of data and weather conditions.
Breaking distance and collision energy scale with square of the speed. So reduction from 70 to 60 is 27% reduction.
Also minimal safe distance is 3 seconds at your current speed. If you can't keep that distance because of traffic - you should slow way down, not to 60 km/h but much lower. So either your comparison isn't fair or the person doing 60 km/h with 2 seconds of gap is the reason the road is unsafe, not the traffic.
And if you've ever actually encountered a queue behind a slow vehicle, you'll know that leaving too much of a gap will cause undertaking luxury German cars to magnetically be sucked into it (no fault if their drivers of course, its all done in the engine control software I hear), suddenly leaving you with 1 second of gap, until you can ease off and grow the gap gently without having the car behind you pile into your rear end.
Either way, the separation in free traffic is hugely greater than in any queue.
