Engine braking myth busted!
I just had a look at the telemetry of the top time from the 1st time trial and although he does shift down to 1st gear at very high speed he's not actually getting any engine braking at all.
That is because of the way that the clutch and shifting works in GT6. When you shift, the clutch is automatically disengaged to disconnect the engine from the gearbox. When the clutch is engaged again after the shift the accelerator is automatically blipped to make sure that the engine rpm matches the gearbox rpm, so it's not just auto-clutch but also auto-accelerator.
An additional aspect of the clutch is that it appears to be used to prevent the engine revs from going off the charts, so when the tachometer bounces off the rev limiter when you shift down to a much too low gear it's actually the clutch going engaged - disengaged - engaged - disengaged really quickly. This effect, coupled with the way that gear shifts works, means that when the rpm goes above the engine's limit, the clutch is disengaged so that the engine can slow down. But then when the clutch is engaged again, the accelerator is triggered to bring the engine rpm up to par with the gearbox.
So at high rpm you don't get any engine braking because the clutch is engaged, and when the rpm drops and the clutch disengages you don't get any engine braking because the accelerator is triggered.
If you look at the telemetry from the lap I mentioned at the beginning, you'll see that during the periods when the rev limiter is bouncing, the accelerator is actually indicating full throttle.
I did a test as well, I accelerated a car to high speeds and checked how fast it would slow down if I shifted down to a too low gear, compared to if I stayed in the current gear. When I stayed in the current gear the car slowed down much faster, indicating that I got way more engine braking than when I shifted down to a too low gear and let the tachometer bounce.
So although the player may think that letting the rev limiter bounce like that gives him some kind of advantage, it's actually not doing anything good at all for him. In fact, all it does is to make him used to a driving style that could be a serious issue for him if he ever moves on to driving real race cars, where there is no auto-clutch and no auto-accelerator.
Edit: Compared his lap to my lap, and although I'm way slower around the track I'm actually braking slightly faster than he is, by keeping the car in an appropriate gear. Why might that be? Perhaps because by doing that I'm actually getting some engine braking, while his engine braking is lost in an auto-clutch & throttle-blip mayhem.
The only car I've been able to get massive amounts of engine braking from by shifting down to a too low gear is the Subaru 360, with a customized gearbox set as low as it can possibly be. By shifting down from 4th gear at about 30 km/h to 1st gear (with a top speed of about 5 km/h) the braking force became so strong that it overpowered the traction from the tyres and caused the wheels to lock. It's actually pretty fun