Do ya know, do ya know, do ya know?
I don't think anyone really knows, but I do think there's a consensus on what it may be like, based upon what we've experienced during the years.
1) Some internal components of the aircraft, seem to be modelled, albeit in a simplified form. The engine, cockpit, pilot, fuel tanks, oil cans.. etc..
2) However, the rest of the plane seems to receive damage upon direct impact to its surface. Damge to the wings and fuselage are registered upon its surface.
3) But the vital internal components which resides within those surfaces, does not seem to be modelled. Spars, struts, flight surface controls(rod/cable), ammo box, etc..
4) AH DM is "All-or-Nothing". There is no intermediate level of damage. If a certain amount of total damage is not reached, the area which was hit does not show any sign of damage. However, if that certain amount is reached, the area is totally 'destroyed'.
...
What Mando points out is valid. I've rarely seen any USAAF/USN footage of .50 rounds actually causing structural failure itself.
* Most of the lethalities caused by .50s documented in guncams are due to fire.
* The few cases I've seen where wings snap off show tell-tale signs of explosions of the ammo box in the wingroots of the target plane. Or, after a prolonged local fire at the wing area which 'ate away' the support structures and thus caused it to fail.
* In other cases, the pilot bails out of what seems to be a structurally sound(at least, visually unconfirmed) plane. It is highly probable that the pilot found the plane uncontrollable, and thus, bailed - which indicates internal controls messed up by concentrated .50 fire. But the structure of the plane does not fail.
The .50 round is a high velocity AP/API, and its incendiary component is severly insufficient to cause any real explosive effect. "Sawing" a wing off with .50s would be something akin to trying to snap a wooden plank with drills.
However, AH registers damage upon surface impact, and that damage is applied directly to the same surface. So, if a certain number of hits are registered at the wingroot, the wingroot will just fall off. Kills in AH are in vast majority caused by structural failures.
If internal DM was more complex, .50s would have a noticeably different effect in the game. You'd rarely be able to snap off a wing with .50s, but the probability of disabling the target plane's controls, or causing damage would become higher.