LOD reduction is already in the game. It's just a matter of some machines being so slow that even with LOD reduced all the way, it's not enough.

28 players is good, 32 is better, and if anything, more entertaining in T1, but if there is a jump from 28 to 32 players in a short time, it may be too much graphically for alot (but not all!) players. I am all for improvements as you mentioned, but it just seems not like something Scawen or Scavier in general would do. W17 seems to me, to be a "throw it into the water and see if it floats" kind of patch. 
? can't you just raise it to 20 or 21?
Also, strange... this somehow doesn't happen to some cars at random, it is weird. And, the map should turn dark grey no matter what if you are lapped traffic right? Well sometimes the cars would pit out and the map would be light grey for them (even after they pass the splits and do several laps to verify they are lapped down), but only dark grey if you used the look keys???