Look at the grip physics:
(vid)
It starts at 2:00 The example of the Open Wheeled car here is Formula Ford.
I don't over-much want to get drawn into this, but I would like to point out a couple things with this video:
1) TCS is on in that video. Judging sliding physics off a video wherein the TCS is on (and active in every corner) is not a great idea.
2) Judging physics purely off of a video, and a video where you can't see what inputs are being given to the car (no telemetry or view of the wheel/controller) is not a great idea. Videos can be made to show what the maker wants them to show, and are at best misleading much of the time.
3) If that's the stock tune (which again no one knows except the video's creator) for the Formula Ford, that thing is terrible. The stock tune has no grip and tries to swap ends constantly under braking. So, as @
BoneSawTX said, you can probably blame bad tunes for part of it.
4) Watching the video, if you really think that he's not losing speed with the slides he's doing (in spite of TCS) then I'm not sure we're watching the same video. Not only were his lines terrible, but the slides were consistently costing him time in nearly every corner. As @
ImaRobot said, you can't have 100% grip and be sliding, and this video shows that to be the case. Even with the TCS keeping the slides from turning into spins, pretty much every time that the little TCS light comes on, he's losing time because the car is not reaching 100% grip. If the light comes on, it's because the car started to slide, and the TCS is slowing it down to control the slide. As I said, you can clearly see that he's losing time with the slides (and the bad lines, but that's a different matter).
As an aside, does anyone know if there's still a light for STM in Forza 5? I haven't used any driving aids in 5, and I haven't used TCS/STM since Forza 1, so I honestly have no idea. If there is no light for it, it's totally possible that the video in question also has STM enabled, which would further cloud the issue of physics, and offers a further point against making sweeping claims about physics based on videos.