OK, then what happens when your connection with the server is restored and there's another car just where you appear again?
Yeah, both cars out of the race, that's what happens. So instead of one person who does not finish, there are two (or possibly more) of them.
I know how frustrating it is to be disconnected during a league race (it happened to me in half the races of the last OWRL DivA season). But I prefer to be the only one to suffer from it rather than risking to take out several other racers when the connection is restored.
In fact, I think LFS is quite patient already, before it gives up. It happened to me in a league race with the FOX or the FO8 that I started lagging right after the start, and so all other cars disappeared from my view a bit before the braking point at turn 1. I'm not sure how long it lasted (maybe 5 seconds or so) but I can tell you that it felt like a long time! I braked and entered the corner without seeing the other cars, wondering if they could still see me and considering whether I should run wide and get out of the way.
They all appeared again before I could make a decision, and thankfully it was just like nothing had happened. But in this case (turn 1 of the first lap) I'd say that LFS was already too forgiving with my bad connection.