I think rubberbanding wouldn't really fit a game like LFS. It works for games that aren't trying to be realistic, but it won't feel right to have cars magically get faster or slower in a racing simulator.
There's also the fact that it'd drastically change how the cars behave. One moment your car's driving like normal, then you get passed and suddenly there's more torque going to the drive wheels, the weight transfer is all different, you get wheelspin more easily, and your car's settings don't fit at all. If you end up in last place, you now have a whole lot more power but your tires, brakes and setup are still the same. That's just going to make things even harder, because you're suddenly driving a completely different car at that point.
This really wouldn't make things easier for the slower drivers. It'd just make things really confusing for them. Having the car's performance change literally all the time will be nearly impossible to get used to.
Dynamically adding weight to the cars isn't a good idea either. You're not simply slowing the cars down by doing that; you're also drastically increasing braking distances, bringing cornering speeds down, increasing tire wear, changing the forces acting on the suspension, and seriously changing the weight transfer and rotational inertia of the car. Again, this would also lead to the car feeling completely different literally every other moment, and would be impossible to get used to.
If you're trying to find a way to bridge the gap between faster and slower drivers, dynamically changing anything about the car is not the right way to do it. It'd only ruin things for everyone.