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AI is notoriously taxing to compute. Things that we consider simple is often SUPER complicated to put into an algorithm and can involve a lot of slow time intensive code.
Even lag shouldn't be an issue because the information should be reconciled on the server, not from the local machines.
Anyway, it's all conjecture. I have no idea what they have actually implemented, but I know what they have now is not the right solution, However, given the GT7 is on it's way for Holidays 2020, it's unlikely that we will see any fixes unless it's something that can be ported over to the new game as well.
Exactly, the resources freed up from not running AI for 19 cars should be plenty to figure out who hit who.
The lag issue is more of a theoretical problem. Every one gets a slightly different race on their console. If you solve it on the server, what exactly are you solving? The server gets all the inputs from everyone, however those are based on what everyone sees on their console. I avoided a car on my screen, yet due to us both having yellow connections at the time, my car punted that car off on his screen. What can the server do?
Beyond tweaking the time penalties (I saw it's now 1.5 sec for wall contact in FIA races) I agree that nothing substantial will change anymore. We're stuck with blaming the car that stays on the road or gains speed for SR Downs.