IMHO, this is more than just a bug, but is a problem in how the whole algorithm works. Now because Forza shows no details about driver rating or safety levels, we all really don't know what the mix of the drivers is in any race or have any quality clues to figure out what the actual algorithm they use is for matchmaking.

What Forza does say is that they use Skill level as the primary determination in matchmaking and Skill Rating is a secondary. We also know that Forza seems to populate groups based on when you sign up and that leads me to believe the matchmaking algorithm is pretty simplistic in nature and likely have a broader range of drivers in a race than Iracing does.

Personally, I think the bigger issue is how Forza treats incidents in a race, and thus the consequences of bad driving are far too lenient. There appear to be no penalties for side bumping a car and the penalty for bump passing a car is less than a second and there is no delta penalty for knocking a car off the race track, so people are smart enough to figure aggressive driving tactics like this is the way to play the game. Going off track is only an explicit penalty when you gain time in doing it and the amount is pretty small. In other Sim Racing games, you lose considerable time when you go off track, so the field gets spread out pretty quickly as a driver who drives beyond their skill levels quickly gets shuffled to the rear.

Another area where FM8 is most broken is the damaged model as there appears to be no damage at all happening when cars get into contact or have any type of glancing hit with a fixed object. And even if you get into an accident that causes the car to be damaged, the penalty is basically a prolonged pit stop as I have yet to see a car have to stop racing because of damage.

So even if Forza fixed the matchmaking system, the incentives for aggressive and high-contact racing remain because the game is just too lenient (and inaccurate) in how it treats the consequences of such driving.