I had few races already with this update and while the damage implementation is not for purists it adds another layer of fun to the races.
Here's what happened to me for example.
I was first on Dragon. Hit the chicane wall, damage to the engine and suspension. I putt the blinkers on, move aside and drive slowly losing 5 positions.
After a while the damage resets and my car is fine and I'm starting to gain on cars in front. 4 laps to go and I'm in 3rd place.
Last lap I overtake the 2nd place car which hits me in the back, we both goes off but he is driving very slowly losing several positions - probably took engine damage during the hit. (if he was giving place it would be just me)
Suspension damage consists of car steering left or right.
Engine damage means less power, erratic revs.
No audiovisual effects. (or I haven't noticed)
Stronger the hit, more severe these effects and I believe longer they last.
Tire wear is accelerated and towards the end of the race I had to brake earlier for corners.