I wish S2 had the option to put "spacers" as you may call it like S1 does, I was messing with the "track" setting on the pit menu -> wheels section. I got my XRT "hella flush"
The master server's IP address can be entered manually on the Multiplayer screen : 213.40.20.2
It looks like 0.2F does connect to the master server if you enter that IP address, so I guess the list of hosts would work correctly if there were any online.
But 0.04Q and 0.1W don't work with the master server even if you enter the correct master server IP address. So you can't see a list of hosts and the only way to get online would be to join a host directly by IP address. I'd suggest you set "Connection type" to "min." which is a client-server setup. The other options try to create peer-to-peer connections but that brings more problems than benefits.
I always liked the idea of having damage/tyre wear etc as being on/off options for when you want to just muck about. This old S1 is reminding me why i like that idea