Back when I started with T, I did some measurements of the motor units' electrical characteristics. Each motor unit pulls 20-25mA at full speed, plus another 5mA or so if it has LEDs. That is running on the standard 4.5V battery-powered blue-box PWM controller. As you can see from the oscilloscope trace, the PWM drive pulses from that unit are just over 4V high.
I choose to run mine with 5.5V pulses but with a maximum duty cycle of around 80%, so the average voltage is limited to that same 4.5V but gives me better low speed starting & stopping.
A conventional controller designed for larger scales running off its normal power supply will produce peak voltages of 15V or more, even if you keep the speed knob turned way down. VERY bad for this sort of small motor, and catastrophic if you accidentally bump the control knob. The Gaugemaster controller you linked to has an built-in mains power supply, so you CANNOT prevent or change that. If it is designed for O gauge, then we are talking 20V peaks. If you use a controller with an external power supply and connected a 5 or 6V AC supply, you would probably be safe enough (no promises though), but could not expect any sort of decent slow running - that would certainly be outside the controller's designed operating range.
In practice, the main limitation on slow speed running in T is the unreliable connection between the track and the wheels. A battery-powered system would bypass that and any compact motor controller that you could squeeze into such a model will have to use PWM since that is the only viable way to do it in the available space.