Agree, Carmageddon 2's physics still feel modern to this day. I can't think of any other game except Beam NG perhaps that achieves the same level. But the impacts in Carma 2 seem to suprass even that one.
"Carmageddon: Reincarnation" had even more advanced physics engine, although game ran a bit slow, so later iteration - "Carmageddon: Max Damage" used less detailed physics engine, suitable for consoles.
I remember trying (and funding) Reincarnation and finding it hard to really explore the physics, as it lacked set-pieces and seemed less fun when compared to Carmageddon 2. It's possible that I played after the big physics downgrade of maybe 2015 [1], or on a machine that couldn't handle it.
I do wish there was a way to set up physics demonstrations, in all the games, for comparison with other engines. Certainly, the common boxes-made-of-jelly issue [2] is something I'm sure you wouldn't see from Carmageddon, though you'd probably see devastating performance issues with that same test.
Carmageddon 2 did notably lack (as far as I could tell) simulations of aerofoils and other surface dynamics and their effects on handling; cars seemed to be modelled as near-blocks as far as drag was concerned.
I believe Carma Reincarnation used a completely new system, I believe they talked about that in the dev blog. While the system may have been similarly powerful in theory, I distinctly remember it also being less fun than the Carma 2's system, somehow less reactive. Carma 2's approach essentially allowed for the car to be crushed into any polygonal form, best illustrated when you drove the car into the underside edge of an angled bridge or similar. It was rad and so much fun, considering and that was 1998 which still blows my mind.