That soil weight, is that something that can be "repaired" during the excavation? 120 psf is relatively dense, if sand at 70 or 80 pcf would help? It seems like this has to be all excavated out anyway, then you're hoping they recompact it so it doesn't cause the adjacent (upper) structure foundation to shift?
I'm not convinced this is going to math out, regardless of whichever soil pressure theory you drag into the daylight from 1920. That upper structure is also probably producing some overburden pressure on the proposed wall.
I don't see how a 4" sidewalk is going to offer enough sliding resistance to act as a pin, there. All you have is weight and friction, unless the sidewalk slams into a basement wall on the left side out of the picture. OSHA, last I checked, wants a 1/2 slope unless they do something fancy, so both sides need "something" during excavation and construction. Not that OSHA is your thing, strictly, but it has implications for the design.