It doesn't look any different to the way LFS already does deformation to be honest. The whole car is treated as a single shell made of the same material - there's no individual components and no internal structure.
I want the GRiD damage model with LFS's driving model.
I remember running into walls and lampposts and cutting my car in half, endless fun. LFS already has an okay damage model, it just needs to have parts that break off when they get too damaged.
It has the deformation, but it could use small dents and indeed parts falling off. And wings that break of instead of bend, but i believe that is on the to-do list
Although not a racing sim, my favourite damage model has to be IL2 Sturmovik's, I'd love to see that in LFS, so many tiny parts that can fall off or burn, would be cool to see your car discintegrate like that although I can't see it doing framerates any good.