I looked through this situation from your car view and also from M.Runas car view.
Conclusion: Modestas Runas was already beside you (maybe not half of the car, but almost half of the car) in real life nobody is going to block someone and cause a crash only because half of the car was not passed him. You should have left him space, but you kept blocking him after you saw he had no place to go. Modestas Runas tried avoiding the crash by braking and going out of the track. His whole car was not on the track anymore, but you still kept blocking. Since Modestas had no place to hide and there were tires coming up in front of him then you had a small collision. It was not a big hit at all, I'm quite surprised your something happened to your tire because usually in LFS that hit does no damage, but you were unlucky and it hit you in the right place. Maybe Modestas Runas should have braked earlier before the turn, but he was already beside you and he probably thought you would give him space. No signs of dive bombing what so ever.
Final answer: There is no penalty given, just a racing incident.
If any of the admins disagree with me, then please give your opinion, but this is the way I see it.