Driving with damage on with previous Forza games is kind of like this, with various parts of the car having % values for the level of damage they received. It's not really reflected in the visuals of course - you didn't see parts flying off and you probably still won't in this game - but there was an attempt. Missing shifts or shifting before engaging clutch did damage transmission (made gear shifts slower), impacts could damage engine (reduces power) or steering (makes steering spongier or more likely to pull in one direction or another), and so on. That system has just remained unchanged for quite some time and doesn't feel very complete.
The real question is whether FM2023 has improved in that department. I'd love to go back to driving with damage on, it'd pair well with longer races and better AI, maybe encourage cleaner driving.