The most realistic would be to reset with the same damage. If you were to "reset" on a real track, the marshalls would tip you back over or put you back on track, whatever. They wouldn't repair your car It should also have a delay of maybe 20-30 seconds in-game, to simulate the time the marshalls would take, IMO.
they should have a realistic reset button and a un-realistic reset button, which they activate by pressing shift+reset button, and they should show them running out to your car and flipping it over in the realistic reset one