In the video Kak's car is lagging and very erratic. How would you perceive going forward if it was you in Mark's car? I wouldn't have stopped as I would have thought that as erratic as his car was that it may have been the problem and not contact. Kak's car is flashing so contact should not be an issue yet it was. You can clearly hear Mark on and off the throttle as Kak's car erratically veered out of pit lane in front of Mark and then suddenly appeared 2 more times in front of him. Now why should one wait for contacted being made when it is clearly the systems fault. There is no solution that will cure all the problems of this game and these arguments/discussions can go on forever but that is why I would say the racing would be better with collisions off. The gentlements agreement for not passing through a vehicle would be no different than the one that is in place for the contact and wait - IMHO - and would make the racing closer.
Yes Kak's car was lagging, however there was contact (due to lag) and the rules state one must wait regardless.
Personally I would have stopped, Kak's car was stationary on the map and there were no other cars on the track around that area of the map.
Another rule that could be introduced is that all people should stop streaming / downloading anything on their PC's / Laptops etc whilst the race is on. Maybe a bit awkward if it was a shared router, but this will help any lag issues.