Of course sods law says further testing will prove me wrong.
But it seems at 100% damage a certain type of hit, I'm not sure exactly what*, reaches a threshold
that simply kills the engine. Damage goes from 1000 to -100 in an instant.
At 50% damage this threshold
is never reached. All the other damages I have adjusted so that they behave in a somewhat realistic way, light hits for light damage and harder hits cause more damage. All damage except gearbox can be repaired, but of course 100% engine will leave you stranded and will need to esc to pit. And remember the gearbox may not be repaired but if you do hit 100% you can use ctrl+g to enable auto and keep driving, do the down shifts manually (sequential) lest they catch you by surprise.
*I'm thinking it has something to do with the colliders passing through each other. Similar to the way AC can't handle hitting the wall on an oval.