This woman is actually on the crosswalk in this photo and she continued on the sidewalk. This is on Bryant Street at Lytton Avenue in Palo.
Bicyclists are very much a part of the traffic flow in this part of Palo Alto. The roads are narrow and everybody rides in the lane here, motorists absolutely expect to see cyclists, nobody honks (unless a car is in the way), nobody flips the bird, everybody gets along just fine. Everybody seems to know what to do and everybody gets along just fine.
Yet, we still see cyclists riding the wrong way on the sidewalk here, in spite of the heavy pedestrian traffic. Bikes are forbidden from the sidewalk (UK:pavement) in the downtown area -- Lytton is one street over from downtown and I don't know if this particular intersection is included in the no-bikes zone.
More bicycle stuff at my cycling blog.