Usually the point of a breakaway clause is so that either party can walk away from the contract at that point without penalty. I don't know the specifics of this contract (maintenance of Croydon trams) but TfL will be sure they are getting the best deal in the long term. Exercising the option of the breakaway clause will generally not attract a significant short-term cost, unlike buying your way out of a contract (which iirc TfL has done on a couple of occasions with track maintenance contracts in the past few years)
The essential things in life are seen not with the eyes, but with the heart. --Antoine de St. Exupery
What I meant was the people employed by Bombardier - would they become employed by TFL or would they face the sack/redundancy?
Depends on the specific arrangements for the people involved. Same may transfer to the new employer but others may not. It will be part of the negotiations between TfL and Bombardier. I would be surprised if there were redundancies at the point of initial transfer but that is merely a guess on my part.
TfL have done a lot of these transfer processes as it has brought work back in house to extend their control over what is done and to try to strip out unnecessary cost / interfaces.