Zen and the Gentle Art of Telling Assholes to Fuck the Hell Off

I think more nuance is needed here:

1. Randos with road rage like in your story should definitely be ignored or smiled at if they are really just in and out of your life in seconds.
2. Toxic people (work or personal) who you do not need to interact with should be just ignored. They want a response. Don’t give them what they want. Flush them from your life ASAP.
3. Toxic people (work or personal) who you DO need to interact with should be responded to in kind — never throw the first punch, but respond at the same level but do NOT get personal, especially if they do. You must document the toxic behavior of theirs to be able to prove (as you may well have to in court or to management) that your are in the right and also who started and/or continued the toxicity. Do whatever you can to move them into #2 (pun intended).
4. Toxic people (work or personal) who you DO need to interact with and cannot get out of your life (a completely ficticious example — the unhappy alcoholic couple who happen to also be owners in your condo building) must be responded to always and immediately as with #3 — with the understanding that your goal is détente with these assholes. They must understand they can never shout you down or bully you, nor will you allow them to write lies about you (remember court and management). If you don’t make that clear, you can expect such assholes to not only contiue their assholery (technical term) but to expand their meddling in your life. In other words, set clear boundaries, defend them rigorously and honor them**. Once they understand they can’t bully, slander or libel you, they’ll move on. Often this “moving on” is physical because not being able to make you join them in their misery bothers them so much that they flush themselves from your life.

** “Honoring” your boundaries means you ignore them completely except when they start something. As in #3, never throw the first punch. This is of course tricky in situations like the completely ficticious asshole couple in your condo, as there may be things they do which affect you and your property but are not speifically directed at you. If you can afford to, seek legal counsel before responding.